The costs of publishing a grade school textbook can be assumed to be as follows:
Fixed expenses for each new edition of the book:
Copy editing $3,000
Art work $1,000
Typesetting $36,000
Variable expenses per copy of the book:
Printing and binding $2.60
Bookstore discounts $2.00
Salespersons' commissions 0.40
Author's royalties $1.00
Each book sells for $20 per copy.
The unit contribution margin for each copy of the book is: _________
The contribution margin ratio for the textbook is: _________
The publishing company is currently selling 8,000 copies of the textbook per edition but management feels that sales could be increased by 1,000 books if the selling price per book was reduced by $1.00 per copy. Implementing such a policy should result in:
______________
The break-even point in total sales revenue at the price of $12 per copy is: __________