E8-4 The editor of Spunk Magazine is considering three alternative prices for


Managerial Accounting 2nd Ed


Price Quantity Demanded
$6.95 20,000
$5.95 25,000
$4.95 32,000

Monthly costs of producing and delivering the magazine include $80,000 of fixed costs and variable cost of $1.50 per issue.

Which price will yield the largest monthly profit?  SOLUTION