Question

1-
The Hartnett Corporation manufactures baseball bats with Pudge

Rodriguez’s autograph stamped on them. Each bat sells for $49 and has a variable cost of $26. There are $37,950 in fixed costs involved in the production process.

a. Compute the break-even point in units.

Break-even point________ units

b. Find the sales (in units) needed to earn a profit of $19,320.

Sales quantity needed______ units

2-

Eaton Tool Company has fixed costs of $340,400, sells its units for $80, and has variable costs of $43 per unit.

a. Compute the break-even point.

Break-even point________ units

b. Ms. Eaton comes up with a new plan to cut fixed costs to $270,000. However, more labor will now be required, which will increase variable costs per unit to $46. The sales price will remain at $80. What is the new break-even point? (Round your answer to the nearest whole number.)

New break-even point________ units

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 or Profitability will be more?

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