Computation of breakeven volume in units

Reference no: EM1310250

Computation of breakeven volume in units and in dollar sales and breakeven chart.

A company is doing an analysis of a proposed new finance textbook.
Fixed cost per edition

Development (reviews class testing and so on)	18,000
Copyediting	5,000
Selling and promotion	7000
Typesetting	40,000
Total	70,000
Variable Costs per copy
Printing and binding	4.2
Administration cost	1.6
Salesperson's commission (2% of selling price)	0.6
Author's royalties (12% of selling cost)	3.6
Bookstore discounts (20% of selling cost)	6
Total	$16.00
Projected selling price	$30.00

Marginal tax rate is 40%

Determine the breakeven volume in units and in dollar sales

Develop a breakeven chart for the textbook

Determine the number of copies the must be sold in order to earn an operating profit of $21,000 on this book

Suppose the company feels that $30.00 is too high a price to charge for the new finance textbook. $24.00 would be a better selling price. What would the breakeven volume be at this new selling price?

Reference no: EM1310250

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