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

question 104

Multiple Choice

An income statement for Crandall's Bookstore for the first quarter of the current year is presented below:
CRANDALL's BOOKSTORE
Income Statement for the First Quarter of the Current Year
$\begin{array}{|l|r|r|}\hline \text { Sales } && \$ 800,000 \\\hline \begin{array}{l}\text { Less: Cost of Goods Sold - } \\\text { all variable }\end{array} && \underline{560,000} \\\hline \text { Gross Margin } & & 240,000 \\\hline \text { Less: Operating Expenses: } & & \\\hline \text { Selling } & \$ 98,000 & \\\hline \text { Administrative } & 98,000 & \underline{196,000} \\\hline \text { Operating Income } & & \underline{\$ 44,000} \\\hline\end{array}$ On average, a book sells for $50. Variable selling expenses are $5.50 per book, with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales, with the remainder being fixed.


-What is the contribution margin for Crandall's Bookstore for the first quarter?

• A) $128,000.
• B) $152,000.
• C) $240,000.
• D) $688,000.

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Definitions:

Global Common Resources

Natural resources not owned by any one nation and accessible to all, such as the oceans, the atmosphere, and space.

Exponential Growth

A pattern of population increase where the rate of growth is proportional to the current size, leading to rapid expansion over time.

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The maximum number of individuals of a particular species that an environment can support sustainably, based on the available resources.

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The principle of maintaining ecological balance by avoiding depletion of natural resources, ensuring long-term environmental health.