Compute the break-even point

Assignment Help Finance Basics
Reference no: EM132484239

Eaton Tool Company has fixed costs of $479,400, sells its units for $100, and has variable costs of $53 per unit.

a. Compute the break-even point.

b. Ms. Eaton comes up with a new plan to cut fixed costs to $370,000. However, more labor will now be required, which will increase variable costs per unit to $56. The sales price will remain at $100. What is the new break-even point?(Round your answer to the nearest whole number.)

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

  • Profitability will be less
  • Profitability will be more

Reference no: EM132484239

Questions Cloud

What are the incremental earnings in the second year : Support costs of $1.5 million per year. If CathFood's marginal tax rate is 35%, what are the incremental earnings in the second year of this project?
Compute operating income : International Data Systems' information on revenue and costs is relevant only up to a sales volume of 125,000 units. After 125,000 units, the market becomes
How will you incorporate your learning into yourlife : Possible questions to ask yourself while writing: How do you relate to the topic or how will you incorporate your learning into yourlife?
Create ICUPs Balance Sheet : Create ICUP's Balance Sheet (Hint: Not all of the accounts above are balance sheet accounts - you may need to calculate ICUP's income!).
Compute the break-even point : Eaton Tool Company has fixed costs of $479,400, sells its units for $100, and has variable costs of $53 per unit.
Compute the break-even point in units-hartnett corporation : Compute the break-even point in units. Find the sales (in units) needed to earn a profit of $23,920.
How to use the strategies in your home-business life : You will write an APA paper of at least 850 words which not only summarizes key points but shows your understanding and comprehension of how to use these.
Indication of the additional financing needs : In a forecast model: the amount needed to balance the balance sheet is an indication of the additional financing needs?
What is the minimum rate the taxable corporate bonds : What is the minimum rate the taxable corporate bonds of the same risk must pay for Shirley to invest in them? An investor, Shirley Noirs, is in the 20% tax

Reviews

Write a Review

Finance Basics Questions & Answers

  What does the data suggest about financial market

What does this data suggest about financial market expectations of 1 year yields, 1 year from now? Explain.

  Determine the annualized yield from investing in this t-bill

You are an analyst for a money market mutual fund that is considering whether to purchase T-bills. The manager of the fund is considering purchasing a 6-month.

  Find the annual percentage rate of loan

You are the owner and operator of grains plus located at Bathurst NSW. The rain during the spring has been the best in a decade and you are expecting a bumper.

  Estimation of a company financial performance

Several types of stakeholders and investors attempt to arrive at an estimation of a company's financial performance and its future outlook for investment

  Why do firms like southwest hedge

1. Why do firms like Southwest hedge? What are the benefits of hedging? (Suggestion: refer to Carter, Rogers and Simkins (2004) for assistance in answering this question).

  Present value of a growing annuity formula

The correct answer is C) $231,525 but I'm not sure if I should use the present value of a growing annuity formula (PV= C * 1/r-g (1- (1+g/ /1+r)n)

  What is the libor forward rate

What is the LIBOR forward rate for the 2-to-3 year period if OIS zero rates for one, two, and three year maturities are 3.5%, 3.7%, and 3.9%, respectively.

  What is your maximum profit

What is your maximum profit? At what point do you reach the maximum profit? What happens as the stock increases in value? b. What is your maximum loss?

  What minimum annual interest rate must she earn

What minimum annual interest rate must she earn to reach her goal? (assume that interest is compounded annually)

  The marginal cost of capital for amounts

Affirm Timer Zeta, Inc., a pharmacutical firm can raise up to $700 million for investment from a mixture of debt, preferred stock and retained equity. Above $700 million, the firm must issue new common stock. Assuming that debt costs and prefer..

  Current liabilities of a company are rs 560000 current

current liabilities of a company are rs 560000 current ratio is 52 quick ratio is 21. find the value of

  How does lessee report the amortization

How does Lessee report the amortization and interest components of lease expense on the income statement under an Operating Lease

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd