Bee Company is a honey wholesaler. An income statement and other data for the second quarter of the year are given below:

Bee Company Income Statement For the Quarter Ended June 30
Sales		$960,000
Cost of goods sold		420,000
Gross margin		540,000
Selling and administrative expenses:
Selling	$200,000
Administrative	75,000	275,000
Net operating income		$265,000

Other data:
Average selling price	$60 per unit
Selling expenses	Fixed selling expenses plus 8% of sales
Administrative expense	Fixed administrative expenses plus $2 per unit

Bee Company's net operating income for the second quarter using the contribution approach is:

$156,200

$685,000

$431,200

$265,000