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 $50. 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.If 20,000 books are sold during the second quarter and this activity is within the relevant range, the company's expected contribution margin would be:

A) $300,000
B) $160,000
C) $860,000
D) $58,000