An income statement for Sam's Bookstore for the first quarter of the year is presented below: 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 contribution margin for Sam's Bookstore for the first quarter is:
A) $180,000
B) $774,000
C) $144,000
D) $756,000

Question

An income statement for Sam's Bookstore for the first quarter of the year is presented below:  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 contribution margin for Sam's Bookstore for the first quarter is:
A) $180,000 
B) $774,000 
C) $144,000 
D) $756,000

Quizplus · Accepted Answer

Unit sales = $900,000 ÷ $50 per book = 18,000 books
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An Income Statement for Sam's Bookstore for the First Quarter