An income statement for Crandall's Bookstore for the firstquarter of the current year is presented below:

On average, a book sells for $90. Variable selling expenses are$3 per book, with the remaining selling expenses being fixed. The variable administrative expenses are 3% 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 = $80,400 + $78.2 X
b Y = $86,400 + $68.7 X
c Y = $81,400 + $78.2 X
d Y = $80,400 + $68.7 X

Transcribed Image Text:

Sales S720,000 Cost of goods sold 504,000 Gross margin 216,000 Selling and administrative expenses: Selling $63,000 Administrative 63.000 126,000 Net operating income $90,000