The University Store, Incorporated is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below: University Store, Incorporated Income Statement. For the Quarter Ended March 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Selling Administrative Net operating income $ 100,000 110,000 $ 800,000 560,000 240,000 210,000 $ 30,000 On average, a book seils 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. If 25,000 books are sold during the second quarter and this activity is within the relevant range, the company's expected contribution margin would be:
The University Store, Incorporated is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below: University Store, Incorporated Income Statement. For the Quarter Ended March 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Selling Administrative Net operating income $ 100,000 110,000 $ 800,000 560,000 240,000 210,000 $ 30,000 On average, a book seils 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. If 25,000 books are sold during the second quarter and this activity is within the relevant range, the company's expected contribution margin would be:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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33.
Subject :- Accounting
Transcribed Image Text:The University Store. Incorporated is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below:
University Store, Incorporated.
Income Statement
For the Quarter Ended March 31
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Selling
Administrative
Net operating income
$ 100,000
110,000
$ 800,000
560,000
240,000
210,000
$ 30,000
On average, a book seils 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.
If 25,000 books are sold during the second quarter and this activity is within the relevant range, the company's expected contribution margin would be
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