Sherry and John Enterprises are using the kaizen approach to budgeting for 2018. The budgeted income statement for January 2018 is as follows:

Sales (168,000 units) $1,080,000

Less: Cost of goods sold 650,000

Gross margin 430,000

Operating expenses 330,000

(includes $60,000 of fixed costs)

Operating income $100,000

Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month.

What is budgeted cost of goods sold for March 2018?

$650,000
	$637,065
	$656,500
	$643,500