Ensco Lighting Company has fixed costs of $$100,000,$ sells its units for $$28,$ and has variable costs of $$15\mathrm{.}50$ per unit.

a$.$ Compute the break$-$even point.

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b$.$ Ms$.$ Watts comes up with a new plan to cut fixed costs to $$75,000.$ However, more labour will now be required, which will increase variable costs per unit to $$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$)?$