Elegant Books produces and sells two book products: an encyclopedia set and a dictionary set. The company

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Elegant Books produces and sells two book products: an encyclopedia set and a dictionary set. The company sells these book sets in a ratio of three encyclopedia sets to five dictionary sets. Selling prices for the encyclopedia and dictionary sets are, respectively, $1,200 and $240; respective variable costs are $480 and $160. The company's fixed costs are $1,800,000 per year. Compute the volume of sales of each type of book set needed to

a. Break even.

b. Earn $800,000 of income before tax.

c. Earn $800,000 of income after tax, assuming a 30 percent tax rate.

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Cost Accounting Traditions and Innovations

ISBN: 978-0324026450

4th edition

Authors: Barfield Jesse, Raiborn Cecily, Kinney Michael

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