The University Store, Inc. is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below: University Store, Inc. Income Statement For the Quarter Ended March 31 Sales $ 800,000 Cost of goods sold 560,000 Gross margin 240,000 Selling and administrative expenses Selling $ 100,000 Administrative 110,000 210,000 Net operating income $ 30,000 On average, a book sells for $40.00. Variable selling expenses are $3.00 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed. The cost formula for selling and administrative expenses with "X" equal to the number of books sold is:
The University Store, Inc. is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below: University Store, Inc. Income Statement For the Quarter Ended March 31 Sales $ 800,000 Cost of goods sold 560,000 Gross margin 240,000 Selling and administrative expenses Selling $ 100,000 Administrative 110,000 210,000 Net operating income $ 30,000 On average, a book sells for $40.00. Variable selling expenses are $3.00 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed. The cost formula for selling and administrative expenses with "X" equal to the number of books sold is:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The University Store, Inc. is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below:
| University Store, Inc. | ||||
| Income Statement | ||||
| For the Quarter Ended March 31 | ||||
| Sales | $ | 800,000 | ||
| Cost of goods sold | 560,000 | |||
| Gross margin | 240,000 | |||
| Selling and administrative expenses | ||||
| Selling | $ | 100,000 | ||
| Administrative | 110,000 | 210,000 | ||
| Net operating income | $ | 30,000 | ||
On average, a book sells for $40.00. Variable selling expenses are $3.00 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed.
The cost formula for selling and administrative expenses with "X" equal to the number of books sold is:
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