The Goldberg-Scheinman Publishing Company is publishing a new managerial economics text for which it has estimated the following total fixed and average variable costs:
Total Fixed Costs:
Copy Editing = $10,000
Typesetting = $70,000
Selling and Promotion = $20,000
Total Fixed Costs = $100,000
Average Variable Costs:
Printing and Binding = $6
Administrative Costs = $2
Sales Commissions = $1
Bookstore Discounts = $7
Author's Royalties = $4
Average Variable Costs = $20
Project Selling Price = $30
a). Determine the breakeven output and total sales revenues and draw the cost-volume-profit chart, and b). determine the output that would generate a total profit of $60,000 and the total sales revenues at the output level; draw the cost-volume-profit chart.