Reference no: EM13704696

Problem 12: With respect to the given data of Problem 11

***Data from problem 11***

Total fixed costs:

Copyediting $ 10,000

Typesetting 70,000

Selling and promotion 20,000

Total fixed costs 100,000

Average variable costs: $ 6

Administrative costs 2

Sales commissions 1

Bookstore discounts 7

Author's royalties __ 4___

Average variable costs $20

Project selling price $30

1. Find the publisher's breakeven output and the output that would lead to a total profit of $60,000 if, as a result of a technological breakthrough in printing, the publisher was able to lower TFC to $40,000. Draw a chart showing your answer.
2. Find the publisher's breakeven output and the output that would lead to a total profit of $60,000 if total fixed costs remained at $100,000 but average variable costs declined to $10. Draw a chart to show your answer