Question #2 FRANCORP is a retailer of ABC products. An income statement for the company's bed liner department for the most recent quarter is presented below: FRANCORP Income Statement For First Quarter of Current Year Sales Less cost of goods sold Gross margin Less operating expenses: Selling expenses Administrative expenses Net income $295,000 245 ooo $950,000 175 ooo 775,000 540 ooo $235 ooo The liners sell, on average, for $380 each. The department's variable selling expenses are S40 per liner sold. The remaining selling expenses are fixed. The administrative expenses are 30% variable and 70% fixed. The company purchases its liners from a supplier at a cost of $125 per liner. Note: Cost of Goods Sold is all variable. Required: Prepare an income statement for the quarter, using the contribution approach.