BUSI 620 help Making Decisions/uophelp.com BUSI 620 help Making Decisions/uophelp.com | Page 17

flight is $11,000. The fixed cost for the plane is $3,000 per day whether
it flies or not.
a) Should the airline replace its night from LA with a morning flight?
b) Should the airline remain in business?
Problem 11: The Goldberg- Scheinman Publishing Company is
publishing a new managerial economics text for which it has estimated
the following total fixed and average variable costs.
Total fixed costs:
Copy editing
10,000
Typesetting
70,000
Selling and promotion
20,000
Total fixed costs:
$100,000
Average variable costs:
Printing and binding
6
Administrative costs
2
Sales commissions
1
Bookstore discounts
7
Author’s royalties
4
Average variable costs
$20
Project selling price
$30
1. Determine the breakeven output and total sales revenues and draw
the cost-volume-profit chart
2. Determine the output that would generate a total profit of $60,000
and the total sales revenues at that output level; draw the cost-
volume-profit chart.
Spreadsheet problem 1: For the following table, calculate in Excel the
average fixed costs (AFC), the average variable cost (AVC), the average
total costs (ATC), and the marginal costs (MC).(note total fixed
cost=$30)