An income statement for Crandall's Bookstore for the first quarter of the current year is presented below: CRANDALL's BOOKSTORE Income Statement for the First Quarter of the Current Year

Sales		$800,000
Less: Cost of Goods Sold - all variable		560,000
Gross Margin		240,000
Less: Operating Expenses:
Selling	$98,000
Administrative	98,000	196,000
Operating Income		$44,000

On average, a book sells for $50. Variable selling expenses are $5.50 per book, with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales, with the remainder being fixed.

What is the cost formula for operating expenses where X represents the number of books sold?

Multiple Choice

• Y = $84,000 + $7.00X.

• Y = $98,000 + $8.50X.

• Y = $98,000 + $7.00X.

• Y = $84,000 + $8.50X.