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 cost formula for selling and administrative expenses with "X" equal to the number of books sold is:
A. Y = $105,000 + $3X
B. Y = $110,000 + $33X
C. Y = $105,000 + $5X
D. Y = $110,000 + $5X
Answer: D
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