Penquin Industries, Inc., manufactures a variety of plastic food containers and serving dishes. The company's income statement for this year in a variable-costing format is as follows:

Penquin's management believes that it can increase prices by an average of \(6 \%\) next year without affecting the number of products sold. Advertising costs are expected to go up next year by \(\$ 9,000\); administrative expenses by \(\$ 30,000\). Production costs are not expected to change.

a. Calculate Penquin's breakeven point in sales dollars for this year.

b. Use the estimates for next year to prepare a variable-costing income statement for that year.

c. Using the forecasted changes, calculate Penquin's breakeven point in sales dollars for next year.

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Sales revenue Less variable production costs $960,000 192,000 Less variable selling expenses 96.000 Contribution margin $672,000 Less fixed manufacturing overhead 300,000 Less fixed selling expenses 139,000 Net income $233,000