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 $ 900,000 630,000 270,000 $100,000 104,000 204,000 $ 66,000 Administrative Net operating income 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. $270,000 $180,000 $144,000 $66,000 The net operating income using the contribution approach for the first quarter is:
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 $ 900,000 630,000 270,000 $100,000 104,000 204,000 $ 66,000 Administrative Net operating income 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. $270,000 $180,000 $144,000 $66,000 The net operating income using the contribution approach for the first quarter is:
Chapter1: Financial Statements And Business Decisions
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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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
Administrative
Net operating income
$ 100,000
104,000
$ 900,000
630,000
270,000
$270,000
$180,000
$144,000
$66,000
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:
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