Barnes Corporation manufactures skateboards and is in the process of preparing next year’s budget. The pro forma income statement for the current year is presented below.
Sales
$1,500,000
Cost of sales:
Direct materials
$250,000
Direct labor
150,000
Variable overhead
75,000
Fixed overhead
100,000
(575,000)
Gross profit
$925,000
Selling and G&A:
Variable
$200,000
Fixed
250,000
(450,000)
Operating income
$475,000
For the coming year, the management of Barnes Corporation anticipates a 10% increase in sales, a 12% increase in variable costs, and a $45,000 increase in fixed expenses. The
breakeven point for next year will be