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

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 $65. Variable selling expenses are $6 per book with the remaining selling expenses being fixed. The variable administrative expenses are 5% of sales with the remainder being fixed. The net operating income using the contribution approach for the first quarter is:

A) $265,000
B) $181,000
C) $135,500
D) $52,000