Bartholomew Manufacturing Company Is Preparing the Operating Budget for the First

Multiple Choice

Bartholomew Manufacturing Company is preparing the operating budget for the first quarter of 2012. They forecast sales of $50,000 in January, $60,000 in February, and $70,000 in March. Cost of goods sold is budgeted at 40% of Sales. Variable and fixed expenses are as follows:
Variable: $\quad$ Miscellaneous expenses : $20 \%$ of Sales
Fixed: $\quad$$\quad$ Salary expense: $\$ 11,000$ per month
$\quad$$\quad$$\quad$$\quad$ Rent expense: $\$ 5,000$ per month
$\quad$$\quad$$\quad$$\quad$ Depreciation expense: $\$ 1,200$ per month
$\quad$$\quad$$\quad$$\quad$ Miscellaneous expenses/fixed portion: $\$ 3,300$ per month
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How much is the operating net income/(loss) for January?

A) $3,500
B) $1,450
C) ( $500)
D) $7,500