Purchase Solution

Finding the Breakeven Price for a Newspaper

Not what you're looking for?

Ask Custom Question

You are a newspaper publisher. You are in the middle of a one-year rental contract for your factory that requires you to pay $600,000 per month, and you have contractual labor obligations of $1.25 million per month that you can't get out of. You also have a marginal printing cost of $.25 per paper as well as a marginal delivery cost of $.10 per paper. If sales fall by 20 percent from 1 million paper per month to 800,000 papers per month, what happens to the AFC per paper, the MC per paper and the minimum amount that you must charge to break even on these costs?

Purchase this Solution
Solution Summary

Given data on a newspaper's fixed and variable costs, this solution shows how to calculate the minimum price that the paper must charge to break even.

Solution Preview

See the attached file. To see how each value was calculated, highlight ...

Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • Various Problems:Cost-Volume-Profit Analysis and more

    From the information provided, determine the three allocation rates (one for each cost pool) to be used by an activity based costing system. ? Finding Suppliers = 300000/200000 = $ 1.5 per call ?

  • Finding Breakeven quantity and sales in dollars

    sales*price=96000*3.75=$360000 Solution describes the steps for finding out breakeven quantity and volume for Sonny's Corporation.

  • Managerial accounting: classify costs, compute breakeven, CV

    205139 Managerial accounting: classify costs, compute breakeven, CVP, margin, overhead I. Classifications Part A: Classifications Determine the classification for each cost item based on 2 different schemes.

  • Calculating a Newspaper's Breakeven Point

    434644 Calculate the newspaper's breakeven point in the short run and long run. You are a newspaper publisher.

  • Breakeven and Target Profit

    The variable cost to make each tractor has been estimated at $1,800.00. The marketing research department has recommended a price of $4,000.00 per tractor. (a) What is the breakeven level of output for the new tractor?

  • Dealing with Cost Accounting

    The above fiscal terms help in taking important decisions such as launching a new product, hospital etc. It also helps in a breakeven analysis, setting the price and also accepting the special order.

  • Break Even Analysis for Shock Electronics

    Breakeven is when the total costs are equal to the total revenues. The procedure for finding the breakeven units is to find the contribution margin per unit first. This contribution margin goes towards meeting the fixed costs.

  • Barry Carter

    Operating breakeven point = Total fixed cost/(Sales price - Variable cost) = $73,500/($13.98 - $10.48) = 21,000 CDs 2. Calculate the total operating costs at the breakeven volume found in part a.

  • Diversified Citrus Industries: Product Price to Wholesalers; Margin; Break Even in Units

    Newspaper advertising will carry a coupon that will entitle the consumer to receive $0.20 off the price of the first can purchased. The retailer will receive the regular margin and be reimbursed by Diversified Citrus Industries.

View More Related Solutions