Lauterbach Corporation manufactures skateboards and is in the process of preparing next year’s budget. The pro forma income statement for the current year is as follows:

Required:
1. What is the break-even point (rounded to the nearest dollar) for Lauterbach Corporation for the current year?
2. For the coming year, the management of Lauterbach Corporation anticipates a 10 percent increase in variable costs and a \($45,000\) increase in fixed expenses.
What is the break-even point in dollars for next year?

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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 $250,000 150,000 $1,500,000 80,000 100,000 580,000 $ 920,000 $300,000 250,000 550,000 $ 370,000