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			$	990,000
Cost of goods sold				675,000
Gross margin				315,000
Selling and administrative expenses
Selling	$	109,000
Administration		122,000		231,000
Net operating income			$	84,000

On average, a book sells for $60. 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 contribution margin for Sam's Bookstore for the first quarter is:

Multiple Choice

• $841,500

• $216,000

• $166,500

• $823,500