CCP Publishers You have been hired by Chris Paraskevopoulos, who is an economics professor emeritus at your university. After retiring from teaching, Chris started an academic publishing business, which publishes university textbooks and trade books, the latter being academic books written by university professors for academic and professional audiences. CCP Publishers is located on the 10th floor of a building in the northern part of the city. It also leases 500 square metres in the basement of the building for its warehouse operations. Chris is the chief editor as well as the CEO. There are four editors in addition to Chris, three editorial assistants, four marketing representatives, a business manager (yourself), and a warehouse supervisor. Chris and the four editors are all equal partners. The marketing representatives are responsible for selling CCP books to university and commercial bookstores. The business model has changed little since CCP was established three years ago. Authors either contact an editor, or the editor contacts the author. In either situation, when there is an agreement between the author (or authors) and an editor that the book will be economically viable, a contract is signed that specifies the general content of the book, a publication schedule, and responsibilities for both CCP and the author or authors. An editor from CCP works with each author (or author group) in the development of a book. Currently, 35 books are in various stages of production. CCP has 42 books in print and available for sale. Most activities are contracted out, including copyediting, layout, index development, art work, photography, and printing. After printing, books are shipped directly to university and commercial bookstores. The income statement for the latest fiscal year is shown below: Sales $ 975,000 Cost of books sold (210,000) Salaries and wages (540,000) Rental (87,000) Shipping (62,000) Miscellaneous (52,000) Operating income $ 24,000 Chris has some concerns about the profitability of CCP. He believes that CCP should be more profitable. He would to control the development costs for book. He would also like to know the profitability of each book, and how that profitability compares with expectations of the editor when the contract is signed. Consequently, you were hired as the business manager. Required As the business manager, use the case approach to address the CEO's profitability concerns.

1. What is the problem 2. Why do you think this is the problem? 3. Give a recommendation for identified problems.

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