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 $ 930,000 Cost of goods sold 655,000 Gross margin 275,000 Selling and administrative expenses Selling $ 105,000 Administrative 114,000 219,000 Net operating income $ 56,000 On average, a book sells for $60. 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:

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abiolataiwo2015 abiolataiwo2015 · Answer 1 · 2021-03-12T01:39:13+01:00

Answer:

$160,300

Explanation:

Calculation for what The contribution margin for Sam's Bookstore for the first quarter is:

Sales revenue $ 930,000

Less: Variable costs

Cost of goods sold $ 655,000

Variable selling expenses ( 930000/60)*5 $ 77,500

Variable administrative expenses (930,000*4%) $ 37,200

Total variable expenses $769,700

Contribution margin $160,300

($930,000-$769,700)

Therefore The contribution margin for Sam's Bookstore for the first quarter is:$160,300