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Multiple-Product Profitability Analysis, Multiple-Level Profitability Analysis Assume UCLA Store sells new college textbooks at the publishers' suggested retail prices and pays the publishers an amount equal to 70% of the suggested retail price. The store's other variable costs average 5% of sales revenue and annual fixed costs amount to $420,000. Required a. Determine the bookstore's annual break-even point in sales dollars. $ 1,680,000 b. Assuming an average textbook has a suggested retail price of $125, determine the bookstore's annual break-even point in units. 13,440 units c. UCLA Store is planning to add used book sales to its operations. A typical used book costs the store 25% of the suggested retail price of a new book. The bookstore plans to sell used books for 75% of the suggested retail price of a new book. Assuming unit sales are unchanged, describe the effect on bookstore profitability of shifting sales toward more used and fewer new textbooks. Profitability will increase bookstore profitability with the same unit sales. d. Chicago Publishers produces and sells new textbooks to college and university bookstores. Assume typical project-level costs total $285,000 for a new textbook. Production and distribution costs amount to 20% of the net amount the publisher receives from the bookstores. Textbook authors are paid a royalty of 15% of the net amount received from the bookstores. Determine the dollar sales volume required for Chicago to break even on a new textbook. This is the amount the bookstore pays the publisher, not the bookstore's sales revenue. Note: Round your answer to the nearest whole dollar. $ 438,462 e. For a project with predicted sales of 10,000 new books at $125 each, determine 1. The bookstores' unit-level contribution. $ 2. The publisher's project-level contribution. $ x 3. The author's royalties. $ 131,250

Multiple-Product Profitability Analysis, Multiple-Level Profitability Analysis Assume UCLA Store sells new college textbooks at the publishers' suggested retail prices and pays the publishers an amount equal to 70% of the suggested retail price. The store's other variable costs average 5% of sales revenue and annual fixed costs amount to $420,000. Required a. Determine the bookstore's annual break-even point in sales dollars. $ 1,680,000 b. Assuming an average textbook has a suggested retail price of $125, determine the bookstore's annual break-even point in units. 13,440 units c. UCLA Store is planning to add used book sales to its operations. A typical used book costs the store 25% of the suggested retail price of a new book. The bookstore plans to sell used books for 75% of the suggested retail price of a new book. Assuming unit sales are unchanged, describe the effect on bookstore profitability of shifting sales toward more used and fewer new textbooks. Profitability will increase bookstore profitability with the same unit sales. d. Chicago Publishers produces and sells new textbooks to college and university bookstores. Assume typical project-level costs total $285,000 for a new textbook. Production and distribution costs amount to 20% of the net amount the publisher receives from the bookstores. Textbook authors are paid a royalty of 15% of the net amount received from the bookstores. Determine the dollar sales volume required for Chicago to break even on a new textbook. This is the amount the bookstore pays the publisher, not the bookstore's sales revenue. Note: Round your answer to the nearest whole dollar. $ 438,462 e. For a project with predicted sales of 10,000 new books at $125 each, determine 1. The bookstores' unit-level contribution. $ 2. The publisher's project-level contribution. $ x 3. The author's royalties. $ 131,250

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Multiple-Product Profitability Analysis, Multiple-Level Profitability Analysis Assume UCLA Store sells new college textbooks at the publishers' suggested retail prices and pays the publishers an amount equal to 70% of the suggested retail price. The store's other variable costs average 5% of sales revenue and annual fixed costs amount to $420,000. Required a. Determine the bookstore's annual break-even point in sales dollars. $ 1,680,000 b. Assuming an average textbook has a suggested retail price of $125, determine the bookstore's annual break-even point in units. 13,440 units c. UCLA Store is planning to add used book sales to its operations. A typical used book costs the store 25% of the suggested retail price of a new book. The bookstore plans to sell used books for 75% of the suggested retail price of a new book. Assuming unit sales are unchanged, describe the effect on bookstore profitability of shifting sales toward more used and fewer new textbooks. Profitability will increase bookstore profitability with the same unit sales. d. Chicago Publishers produces and sells new textbooks to college and university bookstores. Assume typical project-level costs total $285,000 for a new textbook. Production and distribution costs amount to 20% of the net amount the publisher receives from the bookstores. Textbook authors are paid a royalty of 15% of the net amount received from the bookstores. Determine the dollar sales volume required for Chicago to break even on a new textbook. This is the amount the bookstore pays the publisher, not the bookstore's sales revenue. Note: Round your answer to the nearest whole dollar. $ 438,462 e. For a project with predicted sales of 10,000 new books at $125 each, determine 1. The bookstores' unit-level contribution. $ 2. The publisher's project-level contribution. $ x 3. The author's royalties. $ 131,250
Transcribed Image Text:Multiple-Product Profitability Analysis, Multiple-Level Profitability Analysis Assume UCLA Store sells new college textbooks at the publishers' suggested retail prices and pays the publishers an amount equal to 70% of the suggested retail price. The store's other variable costs average 5% of sales revenue and annual fixed costs amount to $420,000. Required a. Determine the bookstore's annual break-even point in sales dollars. $ 1,680,000 b. Assuming an average textbook has a suggested retail price of $125, determine the bookstore's annual break-even point in units. 13,440 units c. UCLA Store is planning to add used book sales to its operations. A typical used book costs the store 25% of the suggested retail price of a new book. The bookstore plans to sell used books for 75% of the suggested retail price of a new book. Assuming unit sales are unchanged, describe the effect on bookstore profitability of shifting sales toward more used and fewer new textbooks. Profitability will increase bookstore profitability with the same unit sales. d. Chicago Publishers produces and sells new textbooks to college and university bookstores. Assume typical project-level costs total $285,000 for a new textbook. Production and distribution costs amount to 20% of the net amount the publisher receives from the bookstores. Textbook authors are paid a royalty of 15% of the net amount received from the bookstores. Determine the dollar sales volume required for Chicago to break even on a new textbook. This is the amount the bookstore pays the publisher, not the bookstore's sales revenue. Note: Round your answer to the nearest whole dollar. $ 438,462 e. For a project with predicted sales of 10,000 new books at $125 each, determine 1. The bookstores' unit-level contribution. $ 2. The publisher's project-level contribution. $ x 3. The author's royalties. $ 131,250
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