Chapter 6, Problem 23P

Devonte Price is a self-published author finishing up his seventh book. His books are sold regionally through book fairs, conferences, and special events. He does not sell through online booksellers, as royalties are typically only $1 a book and the availability online eats up in-person sales. Having an inventory of books at the various live venues is critical to making a sale, but with too much inventory Devonte is stuck with lots of doorstoppers. The table below provides sales data on Books 1 through 6. Devonte anticipates charging $28.50 for Book 7. The printing company that he uses charges $175 to set up for each run, $8 per book to print, and $60 per case (holds approximately 30 books) to ship.

1. a. How many books should Devonte order of Book 7 to break even?
2. b. Devonte thinks Book 7 will sell at least as many as his top seller. If that is the case and he orders that many books from the printer, what would be the net return for the project?
3. c. How many books should Devonte order (and sell) if he hopes to net $20,000 on the project?
4. d. The printer has looked at Book 7 and thinks Devonte should opt for a deluxe package with glossy paper and true color photography. The increased setup fee is $500 and the per book printing cost is $10. Shipping costs remain the same. The printer recommends that Devonte increase the price of the book to $32.50 to cover the extra cost of printing. If Devonte opts for a deluxe printing of Book 7 and adjusts the price as suggested, how many copies should he order (and sell) to break even? How many copies would Devonte have to sell to net $20,000?
5. e. Devonte is worried about how the new book will sell. If he can only sell 150 books, which version should he order (basic or deluxe)?
6. f. If Devonte can only sell 500 books, which version should he order (basic or deluxe)?
7. g. At what level of anticipated sales should Devonte switch from the basic to the deluxe printing of Book 7?