Question
An income statement for Sam's Bookstore for the first quarter of the year is presented below: Sam's BookstoreIncome StatementFor Quarter Ended March 31Sales$840,000Cost of goods
An income statement for Sam's Bookstore for the first quarter of the year is presented below:
Sam's BookstoreIncome StatementFor Quarter Ended March 31Sales$840,000Cost of goods sold520,000Gross margin320,000Selling and administrative expensesSelling$111,000Administration126,000237,000Net operating income$83,000
On average, a book sells for $70. 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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