Volna Appliances want to take over a competitor that makes microwave ovens. They have bid 48 m for the company and expect their offer to be accepted. The microwave ovens are sold for 85 and variable costs amount to 25 per unit.

(a) Work out the break-even point for microwave production.

(b) Volna plan to introduce a rationalization plan that will reduce variable costs by 6 and a price reduction of 16 to increase market share. What is the new break-even point?