Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

DecMeg, a magazine publisher, plan to publish and sell a new fashion magazine at a retail price of $8.95. Variable costs are estimated to be

DecMeg, a magazine publisher, plan to publish and sell a new fashion magazine at a retail price of $8.95. Variable costs are estimated to be $1.50 per copy, with variable selling and distribution costs amounting to $0.45 per copy. DecMeg expects to incur fixed costs of $224,000. The maximum capacity of the plant is 185,000 copies. Calculate the number of copies that need to be sold to breakeven. And what sales volume is necessary for DecMeg to earn a profit of $75,000? DecMeg's contribution margin ratio is 35% (or 0.35). If total sales are $125,000 and breakeven sales are $90,000, what is operating income?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Exchange Rates and International Finance

Authors: Laurence Copeland

6th edition

273786040, 978-0273786047

More Books

Students also viewed these Finance questions