Upward and Onward, Inc., a § 501(c)(3) organization that provides training programs for welfare recipients, reports the following income and expenses from the sale of products associated with the training program. Calculate Upward and Onward’s UBIT.

Gross income from sales …………………………..$425,000

Cost of goods sold ………………………………….  106,000

Advertising and selling expenses …………………..   26,000

Administrative expenses …………………………..  112,500

a. Assume that the sale of the training program products is substantially related to Upward and Onward’s exempt purpose.

b. Assume that the sale of the training program products is not substantially related to Upward and Onward’s exempt purpose.