Estimated sales	18,000 books
Beginning inventory	0 books
Average selling price	$77 per book
Variable production costs	$52 per book
Fixed production costs	$288,000 per semester

The fixed-cost allocation rate is based on expected sales and is therefore equal to

$288,000

18,000

books =

$16

per book.

b. Include nonfinancial measures when evaluating management and rewarding performance. One nonfinancial measure is to compute the excess production ratio. Determine the formula, then compute the ratio at each production level. (Round the ratios to two decimal places.)

# of books				=	Excess production ratio
18,000				=
27,000				=
29,700				=