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 $ 900,000​
Cost of goods sold 640,000​
Gross margin 260,000​
Selling and administrative expenses
Selling $ 102,000​
Administration 108,000​ 210,000​
Net operating income $ 50,000​
​On average, a book sells for $60. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed.

The cost formula for selling and administrative expenses with "X" equal to the number of books sold is:
Y = $86,000 + $7.40X
Y = $99,000 + $7.40X
Y = $86,000 + $5.00X
Y = $99,000 + $9.80X