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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