An Income Statement for Sam's Bookstore for the First Quarter

question 332

Multiple Choice

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

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing detailed information on where and how costs are incurred.

Product V7

A hypothetical or specific version of a product, indicating the seventh iteration or release.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their usage of resources.

Product F1

A specific product identified as F1, details of which would depend on the context in which it is referenced.