Dahl Manufacturing is making its operating budget for the 4 th quarter of 2012. Sales are forecast at $60,000 in October, $65,000 in November, and $70,000 in December. Cost of goods sold it 40% of sales. Expenses are budgeted as follows:
$$\begin{array} { l l l }
\text { Variable: } & \text { Miscellaneous: } & 5 \% \text { of sales } \
\text { Fixed: } & \text { Salary expense: } & \$ 12,600 \text { per month } \
& \text { Rent expense: } & \$ 5,200 \text { per month } \
& \text { Depreciation expense: } & \$ 4,000 \text { per month } \
& \text { Admin expense: } & \$ 5,000 \text { per month }
\end{array}$$
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How much are the total operating expenses in October?

Question

Dahl Manufacturing is making its operating budget for the 4 th quarter of 2012. Sales are forecast at $60,000 in October, $65,000 in November, and $70,000 in December. Cost of goods sold it 40% of sales. Expenses are budgeted as follows:
$$\begin{array} { l l l } 
\text { Variable: } & \text { Miscellaneous: } & 5 \% \text { of sales } \
\text { Fixed: } & \text { Salary expense: } & \$ 12,600 \text { per month } \
& \text { Rent expense: } & \$ 5,200 \text { per month } \
& \text { Depreciation expense: } & \$ 4,000 \text { per month } \
& \text { Admin expense: } & \$ 5,000 \text { per month }
\end{array}$$
-
How much are the total operating expenses in October?

Quizplus · Accepted Answer

Total operating expenses in October = Variable expenses + Fixed expensesVariable expenses = 40% of sales = 40% of $60,000 = $24,000Fixed expenses = Salary expense + Rent expense + Depreciation expense + Admin expense= $12,600 + $5,200 + $4,000 + $5,000 = $26,800Total operating expenses = Variable expenses + Fixed expenses= $24,000 + $26,800 = $29,800

Dahl Manufacturing Is Making Its Operating Budget for the 4th

Dahl Manufacturing Is Making Its Operating Budget for the 4^th