Reference no: EM132746601

The University Store, Inc. is the major supplier of books for the four area colleges. An income statement for the first quarter of 2007 is presented below:

University Store Inc,
Income Statement
For the Quarter Ended March 31, 2007

Sales 800,000 ?
Cost of Goods Sold 640,000 ?
Gross Margin 160,000 ?
Less Operating Expenses:
Selling 105,000 ?
Administrative 35,000 ? 140,000 ?
Net Income 20,000 ?

On average, a book sells for P40. Variable selling expenses are P3 per book; the remaining selling expenses are fixed. The variable administrative expenses are 5% of sales; the remainder is fixed.

Problem 1: The contribution margin for the University Store for the first quarter of 2007 is

Problem 2: The net income computed using the contribution approach for the first quarter of 2007 is

Problem 3: If 45,000 books are sold during the second quarter of 2007, the company's contribution margin would equal