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The company Aussie Stoves specialises in producing a single product, an efficient combustion stove. The following information is estimated for the calender year ending 31
The company Aussie Stoves specialises in producing a single product, an efficient combustion stove. The following information is estimated for the calender year ending 31 December 2021. Annual output 3,500 stoves Selling price per stove $800 $450 Variable manufacturing cost per stove $100,000 Marketing and distribution costs + 10% of selling price for every stove sold $280,000 Annual fixed manufacturing costs $50,000 Annual fixed non-manufacturing costs REQUIRED: (a) Calculate the number of stoves that would need to be sold to breakeven in 2021. (11 marks) (b) If Aussie Stoves is able to reduce its variable manufacturing costs per stove will this increase or decrease the breakeven point? Explain the reason for your
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