The world-famous discounter, Fernwood Booksellers, specializes in selling paperbacks for $7 each. The variable cost per book is $5. At current annual sales of 200,000 books, the publisher is just breaking even. It is estimated that if the authors' royalties are reduced, the variable cost per book will drop by $1. Assume authors' royalties are reduced and sales remain constant; how much more money can the publisher put into advertising (a fixed cost) and still break even?
A. $600,000
B. $466,667
C. $333,333
D. $200,000
E. None of the above
Answer: D
You might also like to view...
The first step of the revenue recognition model is to identify the contract with the customer
Indicate whether the statement is true or false
One of the most useful manipulations of object-oriented databases (ODBs) is the creation of a new table from two or more other tables.
Answer the following statement true (T) or false (F)
On January 5, 2009, Garrett Company, a calendar-year company, issued $500,000 of notes payable, of which $100,000 is due on January 1 for each of the next five years. The proper balance sheet presentation on December 31, 2009, is
A) Current Liabilities, $500,000. B) Current Liabilities, $100,000; Long-term Debt, $400,000. C) Long-term Debt, $500,000 D) Current Liabilities, $400,000; Long-term Debt, $100,000.
Gross sales less sales returns and allowances and sales discounts equals ____________________.
Fill in the blank(s) with the appropriate word(s).