The costs of publishing a grade school textbook can be assumed to be as follows. Use the date for questions 2 to 5.

	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	$1.60
	Bookstore discounts	$2.00
	Salespersons' commissions	$0.25
	Author's royalties	$1.00

Each book sells for $10 per copy.

The unit contribution margin for each copy of the book is:

The contribution margin ratio for the textbook is:

Answer

		41.5%.
		54.0%.
		71.5%.
		51.5%.

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:

Answer

		an increase in total contribution margin of $5,150.
		a decrease in total contribution margin of $4,150.
		a decrease in total contribution margin of $3,850.
		an increase in total contribution margin of $4,850.

The break-even point in total sales revenue at the price of $10 per copy is:

Answer

		$82,474.
		$77,670.
		$65,041.
		$65,041.