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

Sam's Bookstore
Income Statement
For Quarter Ended March 31
Sales		$ 960,000
Cost of goods sold		670,000
Gross margin		290,000
Selling and administrative expenses
Selling	$ 108,000
Administrative	120,000	228,000
Net operating income		$ 62,000

On average, a book sells for $60. 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 net operating income using the contribution approach for the first quarter is:

Multiple Choice

$210,000

$171,600

$62,000

$290,000