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

Bob's Bookstore
Income Statement
For Quarter Ended March 31
Sales			$	880,000
Cost of goods sold				550,000
Gross margin				330,000
Selling and administrative expenses
Selling	$	117,000
Administration		138,000		255,000
Net operating income			$	75,000

On average, a book sells for $55. 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.

The cost formula for selling and administrative expenses with "X" equal to the number of books sold is:

• Y = $110,200 + $5.00X

• Y = $110,200 + $7.20X

• Y = $139,800 + $7.20X

• Y = $139,800 + $9.40X