Break-even analysis. The publisher in Problem 60 finds that rising prices for paper increase the variable costs to $2.70 per book.
(A) Discuss possible strategies the company might use to deal with this increase in costs.
(B) If the company continues to sell the books for $15, how many books must they sell now to make a profit?
(C) If the company wants to start making a profit at the same production level as before the cost increase, how much should they sell the book for now?
Reference:
Break-even analysis. The publisher of a new book figures fixed costs at $92,000 and variable costs at $2.10 for each book produced. If the book is sold to distributors for $15 each, how many must be sold for the publisher to break even?
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