Question

A start up publishing company estimates that the fixed costs of its first major project will be $190,000, the variable cost will be $18, and the selling price per book will be $34. A.) how many books must be sold for this project to break even? B.) suppose the publishers wish to take a total of $40,000 in salary for this project. How many books must be sold to break even, and what is the break-even point, in dollars?

Answer 1

Solution:

we are given that

Fixed cost=$190,000.

Variable cost = $18.

selling price per book =$34.

(A)

For break even , let the number of books required to sell be x

Then we can write

$190000+18x=34x\\\\\text{Solve for x}\\\\190000=34x-18x\\\\16x=190000\\\\x=11875$

Hence the number of books required to sell is 11875 for break even.

(B)

For break even , let the number of books required to sell be x

Then we can write

$190000+40000+18x=34x\\\\\text{Solve for x}\\\\230000=34x-18x\\\\16x=230000\\\\x=14375$

Hence the number of books required to sell is 14375 for break even.

Break even points in dollar is 14375x34=$488750.