What is the breakeven point

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Reference no: EM13331613

Eastman publishing Company is considering publishing apaperback textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, andproduction setup is estimated to be $80,000. Variableproduction and material costs are estimated to be $3 perbook. Demand over the life of the book is estimated to be4000 copies. The publisher plans to sell the text to collegeand university bookstores for $20 each.

a. What is the breakeven point?

b. What profit or loss can be anticipated with a demandof 4000 copies?

c. With a demand of 4000 copies, what is the minimumprice per copy that the publisher must charge to break even?

d. If the publisher beleives that the price per copycould increase to 25.95 and not affect the anticipated demand of4000 copies, what action would you recommend? What profit orloss can be anticipated?

Reference no: EM13331613

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