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
Administration		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: