Answered

Explore Westonci.ca, the premier Q&A site that helps you find precise answers to your questions, no matter the topic. Experience the convenience of getting reliable answers to your questions from a vast network of knowledgeable experts. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform.

suppose that a small publisher selling to book distributors has fixed operating costs of $600,000 each year and variable costs of $3.00 per book. how many books must the firm sell to break even if the selling price is $6.00

Sagot :

ayune

If the selling price is $6.00,  the break-even point will be achieved when the number of books sold is  200,000 units.

Break-even point (BEP) is a situation in which the profit is zero or the company does not gain profit or loss.

Recall that:

Profit = revenue - total cost

Since profit = 0, hence the condition for break-even point is:

revenue = total cost

Revenue = number of units sold x selling price per unit

Total cost = fixed cost + variable cost per unit x number of units sold

In the given problem, given parameters are:

selling price = $6.00

fixed operating cost = $600,000

variable cost = $3.00 per book

Let:

p = number of unit sold

Hence,

revenue = 6 x p = 6p

total cost = 600,000 + 3p

Condition for BEP:

revenue = total cost

6p = 600,000 + 3p

3p = 600,000

p = 600,000/3 = 200,000

Hence, the BEP achieved if the number of books sold is  200,000 units.

Learn more about break-even point here:

https://brainly.com/question/21137380

#SPJ4

We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.