Argyle Company Is Preparing the Operating Budget for the First

Multiple Choice

Argyle Company is preparing the operating budget for the first quarter of 2013. They forecast sales of $50 000 in January, $60 000 in February, and $70 000 in March. Variable and fixed expenses are as follows:
Variable: Power cost (40% of Sales)
Miscellaneous expenses (5% of Sales)
Fixed: Salary expense: $8 000 per month Rent expense: $5 000 per month
Depreciation expense: $1 200 per month Power cost/fixed portion: $800 per month
Miscellaneous expenses/fixed portion: $1 000 per month
How much is the total operating expense for January?

A) $47 500
B) $43 000
C) $41 700
D) $38 500