Question 2 - A Team Publications

A Team publication produces books for publication to the adult market. Books are old for £20 each The cost per book is £1 for paper and binding and £0.50 for printing and £0.50 for authors royalties. Salaries amount to £50 000 per year whilst scheduled maintenance is £10000. Advertising is budgeted and fixed at £20 000 per year with other fixed costs amounting to £20 000 per year. The cost accountant is interested in the breakdown of costs and revenues at 5000 unit intervals.


Level of Output 
Total Revenues 
Fixed Costs 
Variable Costs 
Total Costs 
Profit /Loss

5000 
 
 
 
 


10000 
 
 
 
 


15000 
 
 
 
 


20000 
 
 
 
 


25000 
 
 
 
 


30000 
 
 
 
 


35000 
 
 
 
 


40000 
 
 
 
 



Questions


1. Complete the above table (10 marks)


2. A Team Publications wants to make a target profit of £25000. If costs remained unchanged, examine the impact. (7 marks)


3. Assess the accuracy and usefulness of the above cost information. (8 marks)