Question: The costs of publishing a grade school textbook can be assumed to be as follows:
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Fixed expenses for each new edition of the book:
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Copy editing
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$3,000
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Art work
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$1,000
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Typesetting
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$36,000
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Variable expenses per copy of the book:
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Printing and binding
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$1.60
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Bookstore discounts
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$2.00
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Salespersons' commissions
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$0.25
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Author's royalties
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$1.00
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Each book sells for $10 per copy.
Calculate the unit contribution margin for each copy of the book.