Question

Darwin inc. sells a particular textbook for $26. variable expenses are $19 per book. at the current volume of 53,000 books sold per year the company is just breaking even. given these data, the annual fixed expenses associated with the textbook total:

Answer 1

The cost per textbook is $26. Total cost includes variable and fixed costs. Given the variable cost per textbook of $19 multiplied by the current volume per year of 53,000 books, we will have a total variable cost of $1,007,000. Total cost which is 53,000 multiplied by $26 is $1,378,000 minus the variable cost of $1,007,000 we will get the total associated fixed cost of $371,000.