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.