Question: West Publishing Company is doing an analysis of a proposed new finance text book. Using the following information, answer a through D.
Fixed costs per edition:
|
Development
|
$18,000
|
|
Copyediting
|
$5,000
|
|
Selling/Promo
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$7,000
|
|
Typesetting
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$40,000
|
|
Total
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$70,000
|
Variable costs per copy:
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Printing/bind
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$4.20
|
|
|
Admin costs
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$1.60
|
|
|
Sales comm.
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$0.06
|
2% of selling price
|
|
Royalties
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$3.60
|
12% of selling price
|
|
Discounts
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$6.00
|
20% of selling price
|
|
Total
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$16.00
|
|
Projected selling price $30.00
Tax rate is 40 percent
calculate the number of copies East must sell in order to earn an [operating] profit of $21,000 on this book.