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Marta_Voda [28]
3 years ago
10

An income statement for Sam's Bookstore for the first quarter of the year is presented below: Sam's Bookstore Income Statement F

or Quarter Ended March 31 Sales $ 960,000 Cost of goods sold 670,000 Gross margin 290,000 Selling and administrative expenses Selling $ 108,000 Administration 120,000 228,000 Net operating income $ 62,000 On average, a book sells for $60. 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:
Business
1 answer:
AysviL [449]3 years ago
3 0

Answer:

Answer: The net operating income used in contribution approach the first quarter is 171600

Explanation:

Description                        Amount                                     Amount

Sales                                                                             960000

Variable expenses:  

Cost of good sold                 670000  

Variable selling                       80000

(5 per book*16000 books)      

Variable administrative           38400

(960000*4%)            

Total variables expenses                                                 788400

contribution margin                                                           171600

working note:

unit sales=960000/60 per book=16000 book

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Answer:

It is better to cleaned and shipped to the firm's outlet center at a cost of $23,000 to be sold at $80,000

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In alternative E) all $125,000 is lost

In alternative B, C and D) the loss is $68,000 ($125,000-$80,000+$23,000)

Relevant costs are those evitable, that are cause of a manager decision related to an specific business decision.  

The only cost that can be avoided in these example is the cost of $23,000 so the goods can be cleaned and shipped to the firm's outlet center

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3 years ago
At which stage of the organizational buying decision process would purchasing and engineering personnel visit potential supplier
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2 years ago
(Ignore income taxes in this problem.) If you wanted to withdraw $12,000 from a bank account at the end of each of the next 20 y
prisoha [69]

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3 years ago
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7 0
2 years ago
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