1. Alpha Company reports operating expenses in two categories: (1) selling, and (2) general and administrative. The adjusted trial balance at December 31, year 1, included the following expense and loss accounts:

Accounting and legal fees $120,000

Advertising 150,000

Freight-out 80,000

Interest 70,000

Loss on sale of long-term investment 30,000

Officers salaries 225,000

Rent for office space 220,000

Sales salaries and commissions 140,000

One-half of the rented premises is occupied by the sales department. Brocks total selling expenses for year 1 are:

1. $480,000
2. $400,000
3. $370,000
4. $360,000