Dennis Triumph is the newly elected and charismatic nominee for president of the Republican Party. He is the hero of the right-wing media. In the first nationally televised presidential debates, his "take no prisoners" attitude has left his opponents feeling run over by a Mack truck.
Right Publishers is negotiating to publish Triumph's Manifesto, a new book that Mr. Triumph has written that promises to be an instant success.
The costs of producing and marketing the book are as follows:
Fixed costs $500,000
Variable costs per copy sold $4.00
These costs are before any payments to Triumph. Triumph's agent is negotiating an up-front payment of $3 million plus a 15% royalty rate on the net sales price of each book. The net sales price is the listed bookstore price of $30 minus the margin paid to the bookstore to sell the book. The normal bookstore margin of 30% of the listed bookstore price is expected to apply.
1. a.What is the net selling price per unit?
b.What are the total fixed costs?
c.What are the variable costs per unit?
d.What is the contribution margin per unit?
2a. How many copies must Right Publishers sell to breakeven?
2b. What does this represent in total dollar sales?
3a. How many copies must Right Publishers sell in order to earn a target profit of $2 million?
3b. What does this represent in total dollar sales?