The University Store, Incorporated Is the Major Bookseller for Four

question 128

Multiple Choice

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: 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 contribution margin for the University Store for the first quarter is:

• A) $660,000
• B) $700,000
• C) $180,000
• D) $140,000

---

Definitions:

Agreement Breach

A failure to fulfill the terms of a contract or agreement, which can lead to legal action for resolution.

Equilibrium Price

The price that balances quantity supplied and quantity demanded.

Demand Schedule

A table that shows the quantity of goods or services that consumers are willing and able to purchase at various price levels.

Perfectly Competitive

A market structure characterized by a large number of buyers and sellers, homogenous products, and no barriers to entry or exit.