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13 August, 23:36

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 $ 960,000 Cost of goods sold 670,000 Gross margin 290,000 Selling and administrative expenses Selling $ 108,000 Administration 120,000 228,000 Net operating income $ 62,000 On average, a book sells for $60. 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 cost formula for selling and administrative expenses with "X" equal to the number of books sold is:

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  1. 14 August, 02:05
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    Answer: The net operating income used in contribution approach the first quarter is 171600

    Explanation:

    Description Amount Amount

    Sales 960000

    Variable expenses:

    Cost of good sold 670000

    Variable selling 80000

    (5 per book*16000 books)

    Variable administrative 38400

    (960000*4%)

    Total variables expenses 788400

    contribution margin 171600

    working note:

    unit sales=960000/60 per book=16000 book
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