1) The following information is available for the publisher of Frank the Cow Dog Childrens Books:

Variable cost: $10.00 per book

Sales price:$15.00 per book

Fixed costs:$35,000 per year

These costs apply over a relevant range of the production of one book to the production of 40,000 books.

a) What is the contribution margin per unit?

b) What would profit be at a sales level of 15,000 books?

c) What is the breakeven point in units?

d) Ignore the sales price of $15 per book. What would the sales price have to be for the publisher to earn operating income of $165,000 on sales of 25,000 books?

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