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problem: West Publishing Company is doing an analysis of a proposed new finance text book. Using the following information, 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 percent

find out the number of copies East must sell in order to earn an [operating] profit of $21,000 on this book.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M921478

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