A book publisher has fixed costs of $320,000 and variable costs per book of $8.0

Question

A book publisher has fixed costs of $320,000 and variable costs per book of $8.00. The book sells for $23.00 per copy. How many books must be sold to break even? (Roundup your answer to the next whole number.) If the fixed cost increased, would the new break-even point be higher or lower? Higher Lower It would remain the same There is insufficient information to answer this question If the variable cost per unit decreased, would the new break-even point be higher or lower? Higher Lower It would remain the same There is insufficient information to answer this question

Explanation / Answer

Contribution per unit= sales price- Variable cost per unit

                                        =23-8=15

Break even In units = Fixed Cost / Contribution per unit

                                 =320,000/15

                                 =21,333 books

If Fixed cost increases the break even point will be higher

If variable cost decreases then contribution per unitincreases then break even point lower

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