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		$ 880,000
Cost of goods sold		540,000
Gross margin		340,000
Selling and administrative expenses
Selling	$ 115,000
Administrative	134,000	249,000
Net operating income		$ 91,000

On average, a book sells for $55. Variable selling expenses are $6 per book with the remaining selling expenses being fixed. The variable administrative expenses are 5% of sales with the remainder being fixed.

The net operating income using the contribution approach for the first quarter is:

Multiple Choice

$340,000

$91,000

$200,000

$244,000