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			$	900,000
Cost of goods sold				640,000
Gross margin				260,000
Selling and administrative expenses
Selling	$	102,000
Administration		108,000		210,000
Net operating income			$	50,000

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

		Y = $99,000 + $7.40X
		Y = $86,000 + $5.00X
		Y = $99,000 + $9.80X
		Y = $86,000 + $7.40X