The SAM\'s Publishing Company intends to publish a textbook in Operations Manage
ID: 338107 • Letter: T
Question
The SAM's Publishing Company intends to publish a textbook in Operations Management. Fixed costs are $20,000 per year, variable cost per unit is 50 percent of their $20 per-unit selling price. Give your answers
about the following questions.
___ 7. If annual sales are 3,000 units, what are the annual profits?
a. $10,000 b. $20,000 c. $30,000 d. $40,000 e. None
___ 8. What variable cost per unit would result in $30,000 annual profits if annual sales are 4,000 units?
a. $7.00 b. $7.50 c. $8.00 d. $8.50 e. None
___ 9 How much annual revenue is required to breakeven ?
a. 20,000 b. 30,000 c. 40,000 d. 50,000 e. None
___10. What price must book be sold for to obtain a yearly profit of $30,000, assuming that estimated demand would be realized at the break-even ?
a. $10 b. $30 c. $35 d. $40 e. None
Explanation / Answer
The SAM's Publishing Company intends to publish a textbook in Operations Management. Fixed costs are $20,000 per year, variable cost per unit is 50 percent of their $20 per-unit selling price. Give your answers
about the following questions.
___ 7. If annual sales are 3,000 units, what are the annual profits?
a. $10,000 b. $20,000 c. $30,000 d. $40,000 e. None
___ 8. What variable cost per unit would result in $30,000 annual profits if annual sales are 4,000 units?
a. $7.00 b. $7.50 c. $8.00 d. $8.50 e. None
___ 9 How much annual revenue is required to breakeven ?
a. 20,000 b. 30,000 c. 40,000 d. 50,000 e. None
___10. What price must book be sold for to obtain a yearly profit of $30,000, assuming that estimated demand would be realized at the break-even ?
a. $10 b. $30 c. $35 d. $40 e. None
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