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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

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 $ 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

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

Multiple Choice

$380,000

$315,000

$137,000

$287,700

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