Question

It costs a publishing company $50,000 to make books. The $50,000 is a fixed cost or a cost that cannot change. To help the publishing company sell the books, a marketing company charges 4 dollars for each book sold. If the company charges 9 dollars per book, how many books should they sell to break even?

Answer 1

Answer:

10,000 books

Explanation:

Knowns:

Fixed Costs: $50,000

Variable Costs: $4 (price marketing company charges per book sold)

Sale price: $9 per book

We can solve break even (BE) by using the following formula:

BE = (Fixed Cost) / (Sale price-Variable costs)

BE = ($50,000) / (($9-$4)

BE = $50,000 / $5

BE = 10,000 units

I hope this helps!

-TheBusinessMan

Answer 2

The number of books that should be sold to break even is 10,000 books

The first step is to write out the parameters;

The cost of the publishing company to produce the book is $50,000

A marketing company charges $4 for each book sold

The company charges $9 for each book

Therefore the number of books that should be sold to break even can be calculated as follows;

= fixed cost/sales price-variable cost

= 50,000/(9-4)

= 50,000/5

= 10,000

Hence the books that should be sold to break even is 10,000 books

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