The income statement for Howard's Bookstore for the first quarter of the year is presented below: Howard's Bookstore Income Statement For Quarter Ended March 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Selling Administrative $ 119,000 142,000 $ 910,000 560,000 350,000 261,000 $ 89,000 Net operating income On average, a book sells for $65. Variable selling expenses are $4 per book with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales with the remainder being fixed. The contribution margin for Howard's Bookstore for the first quarter is: A. 826, 700 B. 266, 700 C. 643, 300 D 294 000
The income statement for Howard's Bookstore for the first quarter of the year is presented below: Howard's Bookstore Income Statement For Quarter Ended March 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Selling Administrative $ 119,000 142,000 $ 910,000 560,000 350,000 261,000 $ 89,000 Net operating income On average, a book sells for $65. Variable selling expenses are $4 per book with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales with the remainder being fixed. The contribution margin for Howard's Bookstore for the first quarter is: A. 826, 700 B. 266, 700 C. 643, 300 D 294 000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The income statement for Howard's Bookstore for the first quarter of the year is presented below:
Howard's Bookstore
Income Statement
For Quarter Ended March 31
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Selling
Administrative
$ 119,000
B. 266, 700
C. 643, 300
D. 294, 000
$ 910,000
560,000
142,000
261,000
Net operating income
$ 89,000
On average, a book sells for $65. Variable selling expenses are $4 per book with the remaining selling
expenses being fixed. The variable administrative expenses are 3% of sales with the remainder being
fixed.
350,000
The contribution margin for Howard's Bookstore for the first quarter is:
A. 826, 700
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