Business
The Central Publishing Company is about to publish its first reference book in managerial economics. It is now in the process of estimating costs. It expects to produce 10,000 copies during its first year. The following costs have been estimated to correspond to the expected copies.a. Paper Stock $8.000 b. Typesetting $15,000 c. Printing $50,000 d. Art (including graphs) $9.000 e. Editing $20,000 f. Reviews $3,000 g. Promotion and advertising $12,000 h. Binding $22.000 i. Shipping $10,000In addition to the preceding costs, it expects to pay the authors a 13 percent royalty and its salespeople a 3 percent commission. These percentages will be based on the publishers price of $48 per book. Some of the preceding costs are fixed and others are variable. The average variable costs are expected to be constant. Although 10,000 copies is the projected volume, the book could sell anywhere between 0 and 20,000 copies.Using the preceding data,1. Write equations for total cost, average total cost, average variable cost, and marginal cost.2. Draw the cost curves for quantities from 0 to 20,000 (in intervals of 2,000).
The Skulls, a student social organization, has two different locations under consideration for constructing a new chapter house. The Skulls' president, a POM student, estimates that due to differing land costs, utility rates, etc., both fixed and variable costs would be different for each of the proposed sites, as follows LocationAnnual FixedVariableAlpha Ave.$5,000 $200per personBeta Blvd.$8,000 $150per person If it is estimated that 30 persons will be living in this new chapter house, which location should the Skulls select
Riverton Corp., which began business at the start of the current year, had the following data: Planned and actual production: 40,000 units Sales: 37,000 units at $15 per unit Production costs: Variable: $4 per unit Fixed: $260,000 Selling and administrative costs: Variable: $1 per unit Fixed: $32,000 The contribution margin that the company would disclose on a variable-costing income statement is:________. a. None of the answers is correct. b. $166,500. c. $97,500. d. $370,000. e. $147,000.