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.

Required:
1. What is the break-even point (rounded to the nearest dollar) for Barnes Corporation for the current year?
2. For the coming year, the management of Barnes Corporation anticipates a 10% increase in variable costs and a $45,000 increase in fixed expenses. What is the break-even point for next year? (CMA adapted)
Don Masters and two of his colleagues are considering opening a law office in a large met¬
ropolitan area that would make inexpensive legal services available to those who could not otherwise afford these services. The intent is to provide easy access for their clients by hav¬
ing the office open 360 days per year, 16 hours each day from 7:00 A.M. to 11:00 P.M. The of¬
fice would be staffed by a lawyer, paralegal, legal secretary, and clerk-receptionist for each of the two 8-hour shifts.

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Sales Cost of sales: Direct materials Direct labor Variable overhead Fixed overhead Gross profit Selling and administrative expenses: Variable Fixed Operating income $250,000 $1,500,000 150,000 75,000 100,000 575,000 $ 925,000 $200,000 250,000 450,000 $ 475,000