Anna Cox currently manufactures and sells jeans from a small inner-city laneway factory in Melbourne. Each pair of jeans is currently sold for $100. Fixed costs currently total $60,000 per month. The variable costs associated with producing each pair consist of:

Materials	$15.00
Labour	$10.00

Required

1. How many pairs of jeans would Anna Cox currently need to sell per month for the business to breakeven?
2. Anna Cox is currently considering a plan to expand the firms operations. The expansion would increase the firms fixed costs by $40,000 per month. Through her firms increased buying power, Anna will be able to reduce the variable materials cost of her jeans by $2.50/pair. If the expansion goes ahead, how many pairs of Jeans would Anna need to sell to earn a target profit of $25,000 per month? Beyond these financial considerations, what other factors should Anna consider in evaluating the desirability of this proposal?