Bee Company is a honey wholesaler. An income statement and other data for the second quarter of the year are given below:

Bee Company Income Statement For the Quarter Ended June 30 Sales $ 960,000 Cost of goods sold 420,000 Gross margin 540,000 Selling and administrative expenses: Selling $ 200,000 Administrative 75,000 275,000 Net operating income $ 265,000 Other data: Average selling price $60 per unit Selling expenses Fixed selling expenses plus 8% of sales Administrative expense Fixed administrative expenses plus $2 per unit

Bee Company's net operating income for the second quarter using the contribution approach is:

$156,200
$685,000
$431,200
$265,000