Question

An income statement for Sam's Bookstore for the first quarter of the year is presented below:...

An income statement for Sam's Bookstore for the first quarter of the year is presented below:

Sam's Bookstore
Income Statement
For Quarter Ended March 31
Sales $ 900,000
Cost of goods sold 630,000
Gross margin 270,000
Selling and administrative expenses
Selling $ 100,000
Administration 104,000 204,000
Net operating income $ 66,000

On average, a book sells for $50. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed.

The contribution margin for Sam's Bookstore for the first quarter is:

Multiple Choice

  • $180,000

  • $774,000

  • $144,000

  • $756,000

Business   Accounting   
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