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. Cost of goods sold Gross margin Selling and administrative expenses Selling Administration. Net operating income $100,000 104,000 $900,000 630,000 270,000 204,000 $ 66,000 On average, a book sells for $50. 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 net operating income using the contribution approach for the first quarter is:

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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
Sales
Cost of goods sold
Gross margin.
Selling and administrative expenses
Selling
Administration
Net operating income.
$900,000
630,000
270,000
$100,000
104,000 204,000
$ 66,000
On average, a book sells for $50. 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 net operating income using the contribution approach for the first quarter is:
Transcribed Image Text: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 Cost of goods sold Gross margin. Selling and administrative expenses Selling Administration Net operating income. $900,000 630,000 270,000 $100,000 104,000 204,000 $ 66,000 On average, a book sells for $50. 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 net operating income using the contribution approach for the first quarter is:
Multiple Choice
O
$66,000
$144,000
$180,000
$270,000
Transcribed Image Text:Multiple Choice O $66,000 $144,000 $180,000 $270,000
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