Outback Outfitters sells recreational equipment. One of the company$$s products, a small camp stove, sells for $$50$ per unit. Variable expenses are $$32$ per stove, and fixed expenses associated with the stove total $$108,000$ per month.

Required:

$1.$ Compute the company$$s break$-$even point in unit sales and in total sales dollars.

$2.$ If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break$-$even point? $($Assume that the fixed expenses remain unchanged.$)$

$3.$ At present, the company is selling $8,000$ stoves per month. The sales manager is convinced that a $10\%$ reduction in the selling price would result in a $25\%$ increase in monthly sales of stoves. There would be no change to fixed costs. Using an incremental approach, calculate the effect on operating income of this change. $($Hint: When determining the incremental effect on operating income, remember to also consider the impact of the $10\%$ decline in selling price given the current level of sales of $8,000$ stoves per month.$)$

$4.$ Refer to the data in Required $(3)$ above. How many stoves would have to be sold at the new selling price to attain a target profit of $$35,000$ per month? Ignore taxes.