Question

A publisher for a promising new novel has fixed costs at $57,000 and variable costs of $1.40 for each book produced. If the book is sold to distributors for $11 each, how many books must be produced and sold for the publisher to break even?

a) 5200 books
b) 4800 books
c) 5300 books
d) 5100 books

Answer 1

To break even, the publisher needs to produce and sell 5940 books.

Step-by-step explanation:

To calculate the break-even point for the publisher, we need to find the quantity of books that will result in total revenue equal to total costs. The fixed costs are $57,000 and the variable costs are $1.40 per book. The selling price per book is $11. Let's represent the quantity of books as 'x'.

Total revenue = Selling price * Quantity = $11 * x

Total costs = Fixed costs + Variable costs = $57,000 + ($1.40 * x)

To break even, total revenue should equal total costs. So, we can set up the equation:

$11 * x = $57,000 + ($1.40 * x)

Simplifying the equation, we get:

$11x = $57,000 + $1.40x

Subtracting $1.40x from both sides, we have:

$9.60x = $57,000

Dividing both sides by $9.60, we get:

x = $57,000 / $9.60 = 5940

Rounding to the nearest whole number, the publisher needs to produce and sell 5940 books to break even.