The University Store, Inc. is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below:University Store, Inc.Income StatementFor the Quarter Ended March 31Sales $800,000Cost of goods sold 560,000Gross margin 240,000Selling and administrative expenses Selling$100,000 Administrative 110,000 210,000Net operating income $30,000On average, a book sells for $40.00. Variable selling expenses are $3.00 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder of the administrative expenses are fixed.The contribution margin for the University Store for the first quarter is:
A. $660,000.
B. $140,000.
C. $700,000.
D. $180,000.
Answer: B
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