Question
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 | $ | 840,000 | ||
| Cost of goods sold | 520,000 | |||
| Gross margin | 320,000 | |||
| Selling and administrative expenses | ||||
| Selling | $ | 111,000 | ||
| Administration | 126,000 | 237,000 | ||
| Net 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 contribution margin for Sam's Bookstore for the first quarter is:
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Research Methods In Accounting
Authors: Malcolm Smith
5th Edition
1526490676, 978-1526490674
