Question

CVP On Your Own #1 Just after completing your degree at MU, you and a buddy decide to start your own business, Books R Us, selling your detailed notes from the courses you completed at school. You took 24 courses, and so did your friend, so you have notes for 48 total classes for incoming students to choose from. Each booklet of notes you sell will be 100 pages, regardless of the course. It costs you $2 in coiling for the binding of the book, $5 in paper, $1 in ink charges, and $4 for assembly/packaging. In addition, you have to pay $100,000 for the year to rent a small closet on campus from which to sell your notes. Your salary for the year is $20,000, and so is your friend's. Your plan is to sell each booklet of notes for $50.

Answer 1

e.)	Sales Revenue	11,000,000	=50*220000
	Less: Variable Cost	2,640,000	=(2+5+1+4)*220000
	Less: Fixed Costs	140,000	=100000+20000+20000
	Net profit	$ 8,220,000
f.)	Sales Price	$ 40
	Variable Cost	$ 12
	Contribution margin per booklet	$ 28	=40-12
	Booklets needs to be sold	40,714	=(140000+1000000)/28