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		$ 980,000
Cost of goods sold		680,000
Gross margin		300,000
Selling and administrative expenses
Selling	$ 110,000
Administrative	124,000	234,000
Net operating income		$ 66,000

On average, a book sells for $70. Variable selling expenses are $4 per book with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales with the remainder being fixed.

The net operating income using the contribution approach for the first quarter is: