1.

Gardner 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				$	1,640,000
Cost of sales:
Direct material	$	270,000
Direct labor		170,000
Variable overhead		78,000
Fixed overhead		120,000			638,000
Gross profit				$	1,002,000
Selling and general & admin. Exp.
Variable		220,000
Fixed		270,000			490,000
Operating income				$	512,000

For the coming year, the management of Gardner Corporation anticipates a 10 percent increase in sales, a 12 percent increase in variable costs, and a $47,000 increase in fixed costs. The break-even point for next year (rounded to the nearest dollar) would be: (Do not round intermediate calculations.)