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 December?

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 December?

Quizplus · Accepted Answer

To calculate the total operating expenses in December, add the fixed expenses and the variable expenses. Fixed expenses are: Salary ($12,600), Rent ($5,200), Depreciation ($4,000), and Admin ($5,000), totaling $26,800. Variable expenses are 5% of December sales ($70,000), which is $3,500. Total operating expenses = $26,800 + $3,500 = $30,300.

Dahl Manufacturing Is Making Its Operating Budget for the 4th

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