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

question 112

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 cost formula for selling and administrative expenses with "X" equal to the number of books sold is:

• A) Y = $102,000 + $5X
• B) Y = $102,000 + $7X
• C) Y = $78,000 + $7X
• D) Y = $78,000 + $9X

---

Definitions:

Hobby Shop

A retail store specializing in supplies and materials for various hobbies such as model building, painting, and gaming.

EMV Decision

A decision-making technique based on the calculation of the Expected Monetary Value, used to assess the average outcome of decisions with uncertain elements.

Gross Profits

The difference between the revenue a company receives from its sales and the cost of the goods sold.

Payoff Table

A Payoff Table is a tabular representation of the outcomes, or payoffs, resulting from different decisions or strategies under various conditions or scenarios.