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Calculate the number of books katie needs

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Question - Kate is considering going into business producing music books to sell to elementary schools. She has an offer from a publication firm that will charge her $5,000 setup fee and $1.50 per book. She estimates that she can sell; each book for $4.00. She plans to sell 3,500 books.

A. What is the contribution margin per book?

B. Prepare a contribution margin income statement.

C. How many books does Kate need to sell in order to break even?

D. Assume that Katie wants to earn a profit of $4,000. Calculate the number of books Katie needs to sell to earn a desired profit of $4,000.

E. Assume that Katir estimates that she can sell 3,500 books. What is Katie's margin of safety in number of units?

Reference no: EM132071557

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