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Barry Carter is considering opening a used - book store. He wants to estimate the number of books he must sell to break even. The
Barry Carter is considering opening a usedbook store. He wants to estimate the number of books he must sell to break even. The books will be sold for $ each. variable operating costs are $ per book, and annual fixed operating costs are $ Fill in the blanks below.
a Find the operating breakeven point in number of books
The operating breakeven point is units.
b Calculate the total operating costs at the breakeven volume found in part a
The total operating costs at the breakeven volume is
c If Barry estimates that at a minimum he can sell books per month, should he go into business?
The total units that Barry can sell in a year is units and Barry go into business
d How much EBIT will Barry realize if he sells the minimum books per month noted in part c
The EBIT will be
e Illustrate this breakeven analysis below using a fully labelled graph.
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