Breakeven point-Changing costs/revenues JWG company publishes Creative Crossword

Question

Breakeven point-Changing costs/revenues JWG company publishes Creative Crosswords. Last year the book of puzzle sold for $9.22 with variable operating cost per book of $6.50 and fixed operating costs of $42,000. 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? How many books must JWG sell this year to achieve the breakeven point for the stated operating costs, if fixed operating cost increases to $45,900 and all other figure remains the same? How many books must JWG sell this year to achieve the breakeven point for the stated operating costs, if the selling price increases to $9.85 and all costs remain the same as for last year? 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 $7.13 and all other figures remain the same? What conclusion about the operating breakeven point can be drawn from your answer?

Explanation / Answer

a) Selling price 9.22 Variable cost 6.5 Contribution per unit 2.72 Fixed cost 42000 Break even point    15,441.18 b) Selling price 9.22 Variable cost 6.5 Contribution per unit 2.72 Fixed cost 45900 Break even point    16,875.00 c) Selling price 9.85 Variable cost 6.5 Contribution per unit 3.35 Fixed cost 42000 Break even point    12,537.31 d) Selling price 9.22 Variable cost 7.13 Contribution per unit 2.09 Fixed cost 42000 Break even point    20,095.69

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