Posted: April 11th, 2021

Eaton tool company has fixed costs of $200,000, sells its units for

Eaton Tool Company has fixed costs of $200,000, sells its units for $56, and has variable costs of $31 per unit.

 

         a.      Compute the break-even point.

 

         b.      Eaton comes up with a new plan to cut fixed costs to $150,000. However, more labor will now be required, which will increase variable costs per unit to $34. The sales price will remain at $56. What is the new break-even point?

 

         c.      Under the new plan, what is likely to happen to profitability at very high volume levels (compared to the old plan)?

 

Expert paper writers are just a few clicks away

Place an order in 3 easy steps. Takes less than 5 mins.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00