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At a price of $4.00 each,SHAPE magazine sells 1.25 million copies of its magazine targeted to young women seeking a healthier lifestyle.If the price per issue is increased to $4.50 each,only 1 million copies will be sold.Fixed costs are $1 million and unit variable costs are $0.50 per magazine.Calculate the average revenue for SHAPE magazine at the higher price.
Level of Activity
Level of activity refers to the volume of production or the rate at which a company operates, often influencing costs and operational strategy.
Cost Behavior
Cost behavior analyzes how different costs change or remain stable in relation to the level of production or business activity.
Managerial Decision Making
The process by which managers and leaders of an organization make choices and strategies to achieve organizational goals.
Relevant Range
The range of activity over which changes in cost are of interest to management.
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