Eastman Publishing Copmany is considering publishing a paperback textbook on spread-sheet applications for business. The fixed cost is $160,000. Variable cost is $6 per book. The publisher plans to sell the text to college and university bookstores for $46 each.
a) What is the breakeven point?
b) What profit or loss can be anticipated with a demand of 3800 copies?
c) With a demand of 3800 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 $50.95 and not affect the anticipated demand of 3800 copies, what action would you recommend? What profit or loss can be anticiapted?