A new cookbook is being sold for $25 each. The publisher's fixed costs are $25,500 per year, publishing costs are $14 per book, and the royalty paid to the author is 10% of the selling price. The publisher has a capacity to sell 12,000 books in a year.

a. Draw a detailed break-even chart showing the fixed costs line, total costs line, total revenue line, break-even point, and profit and loss areas.

b. Determine the break-even volume and break-even revenue, and compute the break-even as a percent of the capacity.

c. If the fixed costs increased by 15% per year. publishing costs increased by $6 per book, and the publisher increased the selling price per book to $30, determine the new break-even volume and the new break-even revenue.

AppendixLO1