The University Store, Inc. is the major bookseller for four nearby colleges. An income statement for the first quarter of the year is presented below University Store, Inc. Income Statement For the Quarter Ended March 31 Sales Cost of goods sold Gross margin Selling and administrative expenses $880,800 560,ee0 240,000 Selling Administrative $100,880 110,000 210,ee0 s 38,808 Net operating income On average, a book are 5% of sales: the remainder of the administrative expenses are fixed. sells for $40.00. Variable selling expenses are $3.00 per book: the remaining selling expenses are fixed. The variable administrative expenses The net operating income computed using the contribution approach for the first quarter is