2C1G BARGAIN PRESS IS CONSIDERING PUBLISHING A NEW TEXTBOOK. THE PUB...

206.

CSO: 2C1a

LOS: 2C1g

Bargain Press is considering publishing a new textbook. The publisher has developed the

following cost data related to a production run of 6,000, the minimum possible

production run. Bargain Press will sell the textbook for $45 per copy.

Estimated cost

Development (reviews, class testing, editing)

$35,000

Typesetting

18,500

Depreciation on Equipment

9,320

General and Administrative

7,500

Miscellaneous Fixed Costs

4,400

Printing and Binding

30,000

Sales staff commissions (2% of selling price)

5,400

Bookstore commissions (25% of selling price)

67,500

Author’s Royalties (10% of selling price)

27,000

Total costs at production of 6,000 copies

$204,620

How many textbooks must Bargain Press sell in order to generate operating earnings

(earnings before interest and taxes) of 20% on sales? (Round your answer up to the

nearest whole textbook.)

a.

2,076 copies.

b.

5,207 copies.

c.

5,412 copies.

d.

6,199 copies.