Question

Etxuck279 Inc. sells a particular textbook for $34. Variable expenses are $25 per book. At the current volume of 57,000 books sold per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total:_____
a. $2,451,000
b. $513,000
c. $1,938,000
d. $1,425,000

Answer 1

Answer:

fixed costs= $513,000

Explanation:

Giving the following information:

Selling price= $34

Unitary variable cost= $25

Break-even point in units= 57,000

To calculate the fixed costs, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

57,000= fixed costs / 9

57,000*9= fixed costs

fixed costs= $513,000