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

On average, a book sells for $70. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales with the remainder being fixed.

The contribution margin for Sam's Bookstore for the first quarter is:

Sam's Bookstore Income Statement For Quarter Ended March 31 Sales $910,000 Cost of goods sold 530,000 Gross margin 380,000 Selling and administrative expenses Selling $113,000 Administration 130,000 243,000 Net operating income $137,000