Break-even analysis Barry Carter is considering opening a used-book store. He wants to estimate the number of books
Posted: Tue Jan 18, 2022 12:57 pm
Break-even analysis Barry Carter is considering opening
a used-book store. He wants to estimate the number of books
he must sell to break even. The books will be sold for
$14.04 each, variable operating costs are $9.78 per book,
and annual fixed operating costs are $72,800.
a. Find the operating break-even point in number of
books.
b. Calculate the total operating costs at the break-even
volume found in part (a).
c. If Barry estimates that at a minimum he can sell 2,020 books
per month, should he go into the business?
d. How much EBIT will Barry realize if he sells the minimum
2,020 books per month noted in part (c)?
a used-book store. He wants to estimate the number of books
he must sell to break even. The books will be sold for
$14.04 each, variable operating costs are $9.78 per book,
and annual fixed operating costs are $72,800.
a. Find the operating break-even point in number of
books.
b. Calculate the total operating costs at the break-even
volume found in part (a).
c. If Barry estimates that at a minimum he can sell 2,020 books
per month, should he go into the business?
d. How much EBIT will Barry realize if he sells the minimum
2,020 books per month noted in part (c)?