The ABC Publishing company plans to introduce a new book by a famous author. The book will sell for $6.00/unit.

Costs include:

Set-up/typesetting: $20,000.00

Raw materials per unit: $ 1.20

Royalty per unit: $ 2.00

Advertising: $35,000.00

Shipping per unit: $ .20

Commission per unit: $ .60

1. Calculate the number of books to reach break-even:

2. What would the profit be for ABC Publishing if 35,000 books sell?

3. What would break-even volume be if selling price were dropped from $6.00 to $5.00 while fixed and variable costs remained unchanged?

4. If ABC Publishing had a business objective goal of $100,000 profit, how many books would need to be sold at $6.00, with variable and fixed remaining as originally planned?