The University Store, Inc. is the major supplier of books for the four area colleges. An income
Question:
The University Store, Inc. is the major supplier of books for the four area colleges. An income statement for thefirst quarter of 2007 is presented below:
University Store Inc,
Income Statement
For the Quarter Ended March 31, 2007
Sales 800,000
Cost of Goods Sold 640,000
Gross Margin 160,000
Less Operating Expenses:
Selling 105,000
Administrative 35,000 140,000
Net Income 20,000
On average, a book sells for P40. Variable selling expenses are P3 per book; the remaining selling expenses arefixed. The variable administrative expenses are 5% of sales; the remainder is fixed.
12 The contribution margin for the University Store for the first quarter of 2007 is
13 The net income computed using the contribution approach for the first quarter of 2007 is
14 If 45,000 books are sold during the second quarter of 2007, the company's contribution margin would equal