Purchase Solution

Ensco Lighting Company

Not what you're looking for?

Ask Custom Question

Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit.

a. Compute the break-even point.
b. Ms. Watts comes up with a new plan to cut fixed costs to $75,000. However,
more labor will now be required, which will increase variable costs per unit
to $17. The sales price will remain at $28. 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)?

Purchase this Solution
Solution Preview

Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit.

a. Compute the break-even point.

CM = $28 - 15.5 = $12.5

BEP = ...

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
Recent Feedback
  • "Your explanation to the answers were very helpful."
  • "What does 1 and 0 means in the repair column?"
  • "Went through all of the formulas, excellent work! This really helped me!"
  • "try others as well please"
  • "Thank you, this helped a lot. I was not sure how to plug in those numbers to a formula. This was a great help. Now I have to figure out how to explain cost of capital is used in net present value analysis, and how cost of capital is used in net present value analysis. This stuff gets confusing."
Purchase this Solution
Free BrainMass Quizzes
Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

View More Free Quizzes
Related BrainMass Solutions

  • Break-Even Analysis Managerial Finance

    159283 Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit.

  • Break-even analysis for Ensco Lighting Company

    97219 Break-even analysis for Ensco Lighting Company Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit. 1. Compute the break-even point. 2. Ms.

  • Ensco Lighting Company: Compute the break-even point and evaluate profitability

    56558 Ensco Lighting Company: Compute the break-even point and evaluate profitability 3. Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit. a. Compute the break-even point.

  • Break Even Analysis for a Lighting Company

    54557 Break Even Analysis for a Lighting Company Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit. a. Compute the break-even point. b. Ms.

  • Breakeven, leverage (operating, financial, combined)

    Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit. a. Compute the break-even point. b. Ms. Watts comes up with a new plan to cut fixed costs to $75,000.

  • Finance Questions

    156915 Ensco Lighting Company Prepare responses to the following Problems from Foundations of Financial Management, 11th ed.: Chapter 5: Problems 3, 4, 6, 7, 10 (a through c only), and 20 To complete Problem 7, use the hyperlink below to access the

  • Breakeven Analysis of Several Firms

    196026 Compute Break even for Ensco Lighting, Air Filter, Gibson & Sons, Catering, Katz 3. Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit. a. Compute the break-even point.

  • Finance: Earnings per Share and the Break-Even Point

    Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit. a. Compute the break-even point. b. Ms. Watts comes up with a new plan to cut fixed costs to $75,000.

  • improve the lighting in the restaurant area

    In order to improve the lighting in the restaurant area, we should call a specialist from lighting company to seek his advice on improving the lighting in the restaurant area.

View More Related Solutions