Question
Rockruff Books, Inc. is a major bookseller for four nearby colleges. The income statement for the quarter of the year is presented below: Rockruff Books,
Rockruff Books, Inc. is a major bookseller for four nearby colleges. The income statement for the quarter of the year is presented below:
Rockruff Books, Inc | ||
Income Statement | ||
For the quarter ended April 30, 2022 | ||
Sales | 1,125,000 | |
Less: Cost of Goods Sold | 562,500 | |
Gross Margin | 562,500 | |
Less: Operating Expenses | ||
Less: Selling Expenses | 100,000 | |
Less: Administrative Expenses | 110,000 | 210,000 |
Net Operating Income | 352,500 |
On average, a book sells for 450. Cost of goods sold is entirely variable. Unit variable selling expenses are 32 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed.
1. If 3,500 books are sold during the following quarter and this activity is within the relevant range, the company's EXPECTED CONTRIBUTION MARGIN would be ________________.
2. The TOTAL FIXED COSTS for April 2022 amount to ________________.
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