Compute Break-Even Point at the operating profit level:
Q = Fixed Costs / Contribution Margin per Unit
Ensco Lighting Company has fixed costs of $100,000, sells its units for $28 and has variable costs of $15.50 per unit.
Compute the breakeven point.
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 breakeven point was the new plan a success.