Just after completing your degree at MU, you and a buddy decide to start your own...

 

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Just after completing your degree at MU, you and a buddy decide to start your own business, Books R Us, selling your detailed notes from the courses you completed at school. You took 24 courses, and so did your friend, so you have notes for 48 total classes for incoming students to choose from. Each booklet of notes you sell will be 100 pages, regardless of the course. It costs you $2 in coiling for the binding of the book, $5 in paper, $1 in ink charges, and $4 for assembly/packaging. In addition, you have to pay $100,000 for the year to rent a small closet on campus from which to sell your notes. Your salary for the year is $20,000, and so is your friend's. Your plan is to sell each booklet of notes for $50. a) What are the Total Fixed Costs for the YEAR? b) What are Variable Costs/Unit? c) What is Contribution Margin/unit? d) What is the Break Even Point for the year (consider the entire year's costs)? e) Compute Profit at a YEARLY sales volume of 220,000 units. f) If you change its selling price to $40/booklet, how many booklets need to be sold to make $1,000,000 profit? Just after completing your degree at MU, you and a buddy decide to start your own business, Books R Us, selling your detailed notes from the courses you completed at school. You took 24 courses, and so did your friend, so you have notes for 48 total classes for incoming students to choose from. Each booklet of notes you sell will be 100 pages, regardless of the course. It costs you $2 in coiling for the binding of the book, $5 in paper, $1 in ink charges, and $4 for assembly/packaging. In addition, you have to pay $100,000 for the year to rent a small closet on campus from which to sell your notes. Your salary for the year is $20,000, and so is your friend's. Your plan is to sell each booklet of notes for $50. a) What are the Total Fixed Costs for the YEAR? b) What are Variable Costs/Unit? c) What is Contribution Margin/unit? d) What is the Break Even Point for the year (consider the entire year's costs)? e) Compute Profit at a YEARLY sales volume of 220,000 units. f) If you change its selling price to $40/booklet, how many booklets need to be sold to make $1,000,000 profit?

Answer rating: 100% (QA)

a Total Fixed Costs for the YEAR Rent for the closet 100000 Your salary 20000 Your friends salary 20... View the full answer