9 Executives of Random Recordings, Inc. produced a

digital album titled Sunshine/Moonshine by the Starshine Sisters Band.

(a) Using the price and cost information that follows, prepare a chart like that in Figure 13–6 showing total cost, fixed cost, and total revenue for album quantity sold levels starting at 10,000 through 100,000, using intervals of 10,000 for quantity of albums sold (i.e.,10,000, 20,000, 30,000, and so on).

(b) What is the break-even point for the digital album?

Selling price $10.00 per album Album cover $1.00 per album Songwriter’s royalties $0.30 per album Recording artists’ royalties $0.70 per album Direct material and labor costs to produce the album

$1.00 per album Fixed cost of producing an album

(advertising, studio fee, etc.)

$100,000