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

Sam's Bookstore
Income Statement
For Quarter Ended March 31
Sales $ 980,000
Cost of goods sold 680,000
Gross margin 300,000
Selling and administrative expenses
Selling $ 110,000
Administration 124,000 234,000
Net operating income $ 66,000

On average, a book sells for $70. Variable selling expenses are $4 per book with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales with the remainder being fixed.

The contribution margin for Sam's Bookstore for the first quarter is

A. $894,600

B. $244,000

C. $214,600

D. $765,400

Answer
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