Question: East Publishing Company is doing an analysis of the proposed new finance test. The following data have been obtained

Fixed Costs ( per edition )

Development (reviews, class testing etc) $15,000

Copyediting $ 4, 000

Selling and promotion $ 7,500

Typesetting $23,000

Total $50,000

Variable Costs ( per copy )

Printing and binding $ 6.65

Administrative costs $ 1.50

Salespeople’s commission (2% of selling price) $ 0.55

Author’s royalties (12% of selling price) $ 3.30

Bookstore discounts (20% of selling price) $ 5.50

Total $17.50

Projected selling price $27.50

Using the Data in the table below

1. Determine the company’s break-even volume for this book in

1. Units
2. Dollars Sales

b. Develop a break-even chart for the text

c. Determine the number of copies East must sell to earn a (operating) profit of $30,000 on this text.

d. Determine total (operating) profits at sales levels of

1. 3,000 units
2. 5,500 units
3. 10,000 units

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document