Novus 4U - Break Even Calculations Novus 4 U, a magazine publisher, plans to publish and sell a new business magazine at a retail price of $7. Variable costs are estimated to be production costs of $2 per copy, with variable selling and distribution costs amounting to $0.60 per copy (ie $2.60 total variable costs). Novus 4 U expects to incur fixed costs of $220,000. The maximum capacity of the plant is 200,000 copies. Please answer the following questions. The owners of Novus 4U are considering an advertising campaign that would cost $40,000. The campaign is expected to increase sales from 82,000 to 90,000 magazines. Should the owners advertise? How many copies of the magazine will need to be sold to break even if the selling price is increased to $7.50

Answer rating: 100% (QA)

To determine whether the owners should advertise and the breakeven point with a selling price increa... View the full answer