Derst Inc

Management Jun 06, 2021

Derst Inc. sells a particular textbook for $29. Variable expenses are $21 per book. At the current volume of 44,000 books sold per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total:

Expert Solution

Computation of Annual Fixed Expenses:

At Break-even, there is no profit or loss. In other words , contribution is equal to fixed costs.

Contribution = Units Sold * (Selling Price - Variable Expense)

= 44,000 * ($29 - $21)

= $352,000

So, Fixed Cost is equal to $352,000.

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote