The Aussie Stove Company specialises in producing a single product, an efficient combusion stove. The following information is estimated for the calander year ending 31 December 2013.

Required
a) Calculate the number of stoves that would need to be sold to breakeven in 2008.
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 answer.

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Annual output Selling price per stove Variable manufacturing cost per stove Marketing and distribution costs Annual fixed manufacturing costs Annual fixed non-manufacturing costs 3500 stoves $800 S450 $100 000 + 10% of selling price $280 000 S50 000