Question

A small publishing company is planning to publish a new book. The production costs will include one-time fixed costs (such as editing) and variable costs (suchas printing). The one time fixed costs will total $24,320. The variable costs will be $12.75 per book. The publisher will sell the finished product to bookstores ata price of $20,75 per book. How many books must the publisher produce and sell so that the production costs will equal the money from sales?books

Answer 1

Fixed costs: $24,320

Variable costs: $12.75

Total costs (TC) as function of number of books (x):

TC = 24,320 + 12.75x

Total incomes (TI) as fuction of number of books (x):

TI = 20.75x

So, we want to find the number of books that have to be sold to TC=TI

TC = TI

24,320 + 12.75x = 20.75x

24,320 = 20.75x - 12.75x

24,320 = 8x

x = 24,320/8

x= 3040

The published has to sell 3,040 books to the production costs equate the money from sales.