14. Eastman Publishing Company is considering publishing a paperback textbook on spread- sheet applications for business. The fixed cost of manuscript preparation, textbook design, and production setup is estimated to be S80,000. Variable production and material costs are estimated to be $3 per book. Demand over the life of the book is estimated to be 4000 copies. The publisher plans to sell the text to college and university bookstores for $20 each. a. What is the breakeven point? b. What profit or loss can be anticipated with a demand of 4000 copies? c. With a demand of 4000 copies, what is the minimum price per copy that the publisher must charge to break even? d. If the publisher believes that the price per copy could be increased to $25.95 and not affect the anticipated demand of 4000 copies, what action would you recommend? What profit or loss can be anticinated?

14. Eastman Publishing Company is considering publishing a paperback textbook on spread- sheet applications for business. The fixed cost of manuscript preparation, textbook design, and production setup is estimated to be S80,000. Variable production and material costs are estimated to be $3 per book. Demand over the life of the book is estimated to be 4000 copies. The publisher plans to sell the text to college and university bookstores for $20 each. a. What is the breakeven point? b. What profit or loss can be anticipated with a demand of 4000 copies? c. With a demand of 4000 copies, what is the minimum price per copy that the publisher must charge to break even? d. If the publisher believes that the price per copy could be increased to $25.95 and not affect the anticipated demand of 4000 copies, what action would you recommend? What profit or loss can be anticinated?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter1: Introduction And Goals Of The Firm

Section: Chapter Questions

Problem 5E

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Eastman Publishing Company is considering publishing a paperback textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design,and production setup is estimated to be $160,000. Variable production and material costsare estimated to be $6 per book. The publisher plans to sell the text to college and universitybookstores for $46 each.1. What is the breakeven point? 2. What profit or loss can be anticipated with a demand of 3800 copies? 3. With a demand of 3800 copies, what is the minimum price per copy that the publisher must charge to break even? 4. If the publisher believes that the price per copy could be increased to $50.95 and not affect the anticipated demand of 3800 copies, what action would you recommend?What profit or loss can be anticipated?
17 - Which of the following is a breakeven situation? a) AC=AR B) AC<EN C) P>AC D) P=TC TO) P<AC
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