Southeast U's campus book store sells course packs for $15.00 each, the variable cost per pack is $12.00, fixed costs for this operation are $200,000, and annual sales are 125,000 packs. The unit variable cost consists of a $3.00 royalty payment, VR, per pack to professors plus other variable costs of VO = $9.00. The royalty payment is negotiable. The book store's directors believe that the store should earn a profit margin of 10% on sales, and they want the store's managers to pay a royalty rate that will produce that profit margin. What royalty per pack would permit the store to earn a 10% profit margin on course packs, other things held constant? Do not round your intermediate calculations.
Southeast U's campus book store sells course packs for $15.00 each, the variable cost per pack is $12.00, fixed costs for this operation are $200,000, and annual sales are 125,000 packs. The unit variable cost consists of a $3.00 royalty payment, VR, per pack to professors plus other variable costs of VO = $9.00. The royalty payment is negotiable. The book store's directors believe that the store should earn a profit margin of 10% on sales, and they want the store's managers to pay a royalty rate that will produce that profit margin. What royalty per pack would permit the store to earn a 10% profit margin on course packs, other things held constant? Do not round your intermediate calculations.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Southeast U's campus book store sells course packs for $15.00 each, the variable cost per pack is $12.00, fixed costs for this operation are $200,000, and annual sales are 125,000 packs. The unit variable cost consists of a $3.00 royalty payment, VR, per pack to professors plus other variable costs of VO = $9.00. The royalty payment is negotiable. The book store's directors believe that the store should earn a profit margin of 10% on sales, and they want the store's managers to pay a royalty rate that will produce that profit margin. What royalty per pack would permit the store to earn a 10% profit margin on course packs, other things held constant? Do not round your intermediate calculations.
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