Question

Breakeven pointChanging costs revenues JWG Company publishes Creative Crosswords Last year, the book of puzzles sold for 510 25 with variable operating cost per book of 57 46 and foed operating costs of 539,000 a. How many books must JWG sell this year to achieve the breakeven point for the stated operating costs, if all figures remain the same as for last year? b. How many books must JWG sell this year to achieve the breakeven point for the stated operating costs, if fixed operating costs increase to 542,900 and all other figures remain the same? c. How many books must JWG sell this year to achieve the breakeven point for the stated operating costs. If the selling price increases to $10.96 and all costs remain the same as for last year? d. How many books must JWG sell this year to achieve the breakeven point for the stated operating costs, if the variable operating cost per book increases to $8.17 and all other figures remain the same? e. What conclusions about the operating breakeven point can be drawn from your answers? a. The breakeven point will be books (Round to the nearest integer) Enter your answer in the answer box and then click Check Answer 4 parts Clear All Check Answer remaining

Answer 1

A B E F H к M a 1 2 3 4 Books to be sold to achieve breakeven point = Fixed Cost / Contribution per book = Fixed Cost / (Selling Price per book - Variable Cost per book) = $39000 / ($10.25 - $7.46) = $39000 / $2.79 = 13978 5 6 7 8 9 b) 10 11 Books to be sold to achieve breakeven point if Fixed Cost increase to $42900 = Fixed Cost / Contribution per book = Fixed Cost / (Selling Price per book - Variable Cost per book) = $42900 / ($10.25 - $7.46) = $42900 / $2.79 = 15376 12 13 14 15 16 c) 17 18 19 20 21 Books to be sold to achieve breakeven point if Selling Price increase to $10.96 = Fixed Cost / Contribution per book = Fixed Cost / (Selling Price per book - Variable Cost per book) = $39000 / ($10.96 - $7.46) = $39000 / $3.50 = 11143 22

A B E F H к 22 23 d) 24 25 Books to be sold to achieve breakeven point if Variable Cost increase to $8.17 = Fixed Cost / Contribution per book = Fixed Cost / (Selling Price per book - Variable Cost per book) = $39000 / ($10.25 - $8.17) = $39000 / $2.08 = 18750 26 27 28 29 30 e) 31 32 33 34 The Operating Breakeven Point is directly related with Fixed Cost and Variable Cost and inversely related with Selling Price, as Breakeven Point is increases if Fixed and Variable Costs increases but Breakeven Point is decreases when selling price increases 35 36 37 38 39 40 41 42 43 44 45 46