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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

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 $950,000

Cost of goods sold 660,000

Gross margin 290,000

Selling and administrative expenses

Selling $106,000

Administration 116,000 222,000

Net operating income $68,000

On average, a book sells for $50. Variable selling expenses are $4 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:

Y = $115,500 + $6.50X

Y = $98,500 + $6.50X

Y = $98,500 + $9.00X

Y = $115,500 + $4.00X

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