Multiproduct Break-Even Analysis

Karen is the manager of Skoos Bookstore and needs to analyze the product mix necessary to ensure a profitable business. She has reviewed three types of book genres that are the main sellers at the store, and compiled the following average information:

Children: selling price = $8.00 per book;

variable cost = $5.00 per book;

annual forecasted sales units = 4,500 books

Fiction: selling price = $12.00 per book;

variable cost = $8.00 per book;

annual forecasted sales units = 3,000 books

Non-Fiction: selling price = $20.00 per book;

variable cost = $12.50 per book; annual forecasted sales units = 2,000 books

The overall monthly fixed costs are $3,000 per month.

Note that Skoos Bookstore operates Monday Saturday (i.e., 6 days per week) and is closed two weeks per year (i.e., 50 weeks per year).Please use this information to solve the following problems. For each question, you may use an Excel Spreadsheet to assist with your calculations.

Please also provide sample manual calculations as indicated below.(a) Determine the annual revenueBreak-Even Point (BEP$) for Skoos Bookstore. Please write out the manual calculations for at least one full product line (i.e., book genre). Also, show the manual setup and work for the final BEP$ calculation.(b) Determine the daily revenueBreak-Even Point (BEP$) for Skoos Bookstore. Please show the manual setup and work for the final BEP$ calculation.(c) Determine the daily volumeBreak-Even Point (BEPx) for each book genre at Skoos Bookstore. Please show the manual setup and work for at least one of the final BEPxcalculations (i.e., at least one book genre).