You own a 500-unit apartment complex and charge a monthly rental rate of $1,500 per unit. When the apartments are 75% occupied, monthly operating costs total $304,875, $60,000 of which are fixed costs. A nearby manufacturing plant has just announced that it is expanding its operations in the upcoming year. As a result, you anticipate occupancy will increase by 15%. Using your knowledge of cost behavior, what is your predicted monthly operating costs?

A.

$353,850

B.

$321,150

C.

$237,500

D.

$358,125

E.

None of the above.