Question
Small Scale Publishing has just commenced business and will sell only one title, New to Business. Market analysis has indicated that sales for the next
Small Scale Publishing has just commenced business and will sell only one title, New to Business. Market analysis has indicated that sales for the next 6 months should be 5 000 copies. The accountant has provided information that shows variable costs are $100 per title with fixed costs expected to be $200 000. The book is expected to sell for $150. Required a) Calculate the breakeven number of books to be sold. (Marks 25) b) Calculate the estimated profit for the first six months. (Marks 25) c) If fixed cost and variable cost are increased by 20% but the competitive market has forced the sales price to be unchanged. What will be the impact on the results of parts (a) and (b)?
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