DecMeg, a magazine publisher, plan to publish and sell a new fashion magazine at a retail price of $8. Variable costs are estimated to be $1.

DecMeg, a magazine publisher, plan to publish and sell a new fashion magazine at a retail price of $8.95. Variable costs are estimated to be $1.50 per copy, with variable selling and distribution costs amounting to $0.45 per copy. DecMeg expects to incur fixed costs of $224,000. The maximum capacity of the plant is 185,000 copies. Calculate the number of copies that need to be sold to breakeven. And what sales volume is necessary for DecMeg to earn a profit of $75,000? DecMeg’s contribution margin ratio is 35% (or 0.35). If total sales are $125,000 and breakeven sales are $90,000, what is operating income?

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