In the dynamic landscape of manufacturing and sales, Caribann is a company with the

potential to produce $100,000$ units of its sole product annually. Caribann's interplay of costs

and production capacity prompts an analysis that will guide it in navigating the balance

between revenue generation and cost management. As we examine Caribann's scenario,

critical financial data emerges, laying the foundation for strategic decision$-$making.

The following information is available:

Selling price $--------------------$$$42$ per unit

Variable manufacturing costs $--------------$$$24$ per unit

Fixed manufacturing costs$-------------$$$360,000$ annually

Fixed marketing and administrative costs $-------$$$240,000$ annually

Variable marketing and administrative costs $---------$$$4$ per unit

$3)$ In attempting to achieve better results in the marketplace, management has been looking at changing the reward system for marketing, distribution and sales personnel. This would result in an increase in variable marketing and administrative costs by $$2$ per unit, and would reduce fixed marketing and distribution costs by $$100,000$:

a$)$ Calculate the number of units required to breakeven if management implementedthe changes $.$

b$)$ Would you suggest that management pursue the changes? Explain