(Solution) - Headlines Publishing Company HPC specializes in international -(2025 Original AI-Free Solution)

Paper Details

Headlines Publishing Company (HPC) specializes in international business news publications. Its principal product is HPC-Monthly, which is mailed to subscribers the first week of each month. A weekly version, called HPC-Weekly, is also available to subscribers over the Web at a higher cost. Sixty percent of HPC?s subscribers are nondomestic customers. The company experienced a fast growth in subscribers in its first few years of operation, but sales have begun to slow in recent years as new competitors have entered the market. HPC has the following cost structure and sales revenue for its subscription operations on a yearly basis. All costs and all subscription fees are in U.S. dollars.
Fixed Cost
$306,000 per year
Variable Costs
Mailing ............. $0.60 per issue
Commission ........... 3.00 per subscription
Administrative .......... 1.50 per subscription
Sales Mix Information (constant in sales units)
HPC-Weekly ........... 20%
HPC-Monthly ............ 80%
Selling Price
HPC-Weekly ........... $47 per subscription
HPC-Monthly ............ 19 per subscription

Required
Use these data to determine the following:
1. Contribution margin for weekly and monthly subscriptions.
2. Contribution margin ratio for weekly and monthly subscriptions.
3. HPC?s breakeven point in sales units and sales dollars.
4. HPC?s breakeven point to reach a target before-tax profit of $75,000.
5. What are the critical success factors for HPC? For its domestic subscribers? For its international subscribers?
How can CVP analysis be used to make HPC more competitive?