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Eaton Tool Company has fixed costs of $232,400, sells its units for $62, and has variable costs of $34 per unit. a. Compute the break-even point. b. Ms. Eaton comes up with a new plan to cut fixed costs to $180,000. However, more labor will now be required, which will increase variable costs per unit to $37. The sales price will remain at $62. What is the new break-even point? Note: 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
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