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 | $ | 990,000 | ||
| Cost of goods sold | 675,000 | |||
| Gross margin | 315,000 | |||
| Selling and administrative expenses | ||||
| Selling | $ | 109,000 | ||
| Administration | 122,000 | 231,000 | ||
| Net operating income | $ | 84,000 | ||
On average, a book sells for $60. Variable selling expenses are $6 per book with the remaining selling expenses being fixed. The variable administrative expenses are 5% of sales with the remainder being fixed.
The cost formula for selling and administrative expenses with "X" equal to the number of books sold is:
Multiple choice answers=
A) Y= $133,500 + $9.00x
B) Y= $82,500 + $9.00x
C) Y= $82,500 + $12.00x
D) Y= $133,00 + $6.00x
Homework Answers
Answer #1
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