Press Publishing Corporation has two major magazines: Star Life and Weekly News. During 2000 , Star Life
Question:
Press Publishing Corporation has two major magazines: Star Life and Weekly News. During 2000 , Star Life sold 3 million copies at $\$ 1.00$ each, and Weekly News sold 2.1 million copies at $\$ 1.10$ each. Press Publishing accumulated the following cost information:
Required 1. Use the high-low method to estimate the variable and fixed manufacturing costs of each magazine. (Round the variable cost rate to three decimal places.)
2. If all selling expenses are fixed and they total $\$ 500,000$ for Star Life and $\$ 400,000$ for Weekly News, prepare contribution margin income statements for the two magazines at sales of 3 million copies each.
3. Which magazine is more profitable at sales of 2 million copies?
4. Interpretive Question: If the same total dollar amount spent on either magazine will result in the same number of new subscriptions, which magazine should be advertised?
Step by Step Answer:
Survey Of Accounting
ISBN: 9780538846172
1st Edition
Authors: James D. Stice, W. Steve Albrecht, Earl Kay Stice, K. Fred Skousen