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klasskru [66]
3 years ago
12

Etxuck327 Inc. sells a particular textbook for $39. Variable expenses are $28 per book. At the current volume of 49,000 books so

ld per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total:
Business
1 answer:
Westkost [7]3 years ago
5 0

Answer:

539,000.00  

Explanation:

As per the contribution margin analysis concept, the break-even point is obtained by dividing fixed cost by contribution margin per unit.

For Etuck327,

The selling price is $39

Variable expense is $28

Break-even in units is 49,000 books.

Contribution margin per unit = selling price - variable costs

=$39- $28

=$11

if Break-even = fixed cost/ contribution margin per unit, then

49,000= fixed cost / 11

fixed costs = 11 x 49000

Fixed costs = 539,000.00    

                   

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