When you compare the entries that recorded the sales of 15,000 of books, and the related costs,
Question:
When you compare the entries that recorded the sales of 15,000 of books, and the related costs, you will see that on average Rebeli Press received a price of $18 per book. There were three variable costs. On average, printing cost $5 per book, royalties were $2, and shipping was $3.
In order to publish and sell the books, Rebeli Press incurred additional costs, which do not vary by book sold; publication rights of $30,000, prepublication costs of
$8,000, and marketing of $5,000. These costs total $43,000.
Using these facts, answer the following. You may wish to refer to Chapter 5’s discussion of cost–volume–profit analysis.
A. What was the contribution margin per book, in dollars?
B. What number of books did Rebeli Press need to sell in order to “break even” and cover the other costs of $43,000?
C. If Rebeli Press reduced its price to $16 per book, what number of books would it need to “break even,” with the same $43,000 in other costs?
Step by Step Answer:
Introductory Accounting A Measurement Approach For Managers
ISBN: 9781138956216
1st Edition
Authors: Daniel P. Tinkelman