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 $1,000,000 Cost of goods sold 665,000 Gross margin 335,000 Selling and administrative expenses Selling $107,000 Administration 118,000 225,000 Net operating income $ 110,000 On average, a book sells for $50. Variable selling expenses are $4 per book with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales with the remainder being fixed The net operating income using the contribution approach for the first quarter is