Author Question: Elephant Books sells paperback books for $8 each. The variable cost per book is $6. At current ... (Read 459 times)

markburs · **on:** Aug 7, 2023

Question 1

DeLong Inc. has fixed operating costs of $510,000, variable costs of $3.20 per unit produced, and its products sell for $5 per unit. What is the company’s break-even point; that is, at what unit sales volume would income equal costs?

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283,333

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296,667

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310,813

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345,403

Question 2

Elephant Books sells paperback books for $8 each. The variable cost per book is $6. At current annual sales of 300,000 books, the publisher is just breaking even. It is estimated that if the authors’ royalties are reduced, the variable cost per book will drop by $1.50. Assume authors’ royalties are reduced and sales remain constant; how much more money can the publisher put into advertising (a fixed cost) and still break even?

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$200,000

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$310,000

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$450,000

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$550,000

MistyHubbard · **Reply #1 on:** Aug 7, 2023

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