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 | ||

Administration | 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 contribution margin for Sam's Bookstore for the first quarter is

A. $894,600

B. $244,000

C. $214,600

D. $765,400

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