The 4 x 4 Shop is a large retailer of equipment for pickup trucks. An income statement for the company's bed liner department for the most recent quarter is presented below: The 4 x 4 Shop Income Statement-Liner Department For First Quarter of Current Year Sales $700,000 Less cost of goods sold 250,000 Gross margin 450,000 Less operating expenses: Selling expenses $195,000 Administrative expenses 145,000 340,000 $110,000 Net income The liners sell, on average, for $350 each. The department's variable selling expenses are $35 per liner sold. The remaining selling expenses are fixed. The administrative expenses are 25% variable and 75% fixed. The company purchases its liners from a supplier at a cost of $125 per liner. Required: Prepare an income statement for the quarter, using the contribution approach.