Question

1. Eastman Publishing Company is considering publishing a paperback textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and production setup is estimated to be $160,000. Variable production and material costs are estimated to be $6 per book. The publisher plans to sell the text to college and university bookstores for $46 each. a. What is the model for cost and revenue, what is the breakeven point? b. What profit or loss can be anticipated with a demand of 3800 copies? c. With a demand of 3800 copies, what is the minimum price per copy that the publisher must charge to break even?

Answer 1

as of n are the no- of units. Total Cost = 160000 +6n Revenue = 46 Oft Break even point, Revenue - Total cost 461 - 160000 +6" N= 4000 books b) Perofit = Revenue- Cost - 3800 X 46 - 160000-6x3800 : - - $ 8000 Loss = $8000

© net price bep ... Revenue - Total cost 3800P = 160000 + 3800 X6 P- $48.11