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:

Viroids

Small, circular RNA molecules that infect plants, lacking a protein coat.

Retroviruses

A type of virus that inserts a copy of its RNA genome into the DNA of a host cell it invades, changing the genome of that cell, such as HIV.

Prions

Infectious agents composed solely of protein, known to cause rare neurodegenerative diseases.

DNA OR RNA

Nucleic acids that carry genetic information (DNA) or are involved in protein synthesis (RNA).