Computation of break even points

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Reference no: EM1316466

Computation of break even points.

East Publishing Company is doing an analysis of a proposed new finance text book. Using the following data, answer a through d.

Fixed costs per edition:

Development	$18,000
Copyediting	$5,000
Selling/Promo	$7,000
Typesetting	$40,000
Total	$70,000

Variable costs per copy:

Printing/bind	$4.20
Admin costs	$1.60
Sales comm.	$0.06	2% of selling price
Royalties	$3.60	12% of selling price
Discounts	$6.00	20% of selling price
Total	$16.00

Projected selling price $30.00
Tax rate is 40%
Determine the number of copies East must sell in order to earn an (operating) profit of $21,000 on this book.

Reference no: EM1316466

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