Reference no: EM132633875

Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented below.

Sales $3,800,000

Cost of sales:

Direct material $530,000

Direct labor 400,000

Variable overhead 290,000

Fixed overhead 750,000 1,970,000

Gross profit $1,830,000

Selling and General & Admin. Exp.

Variable 780,000

Fixed 280,000 1,060,000

Operating income $770,000

For the coming year, the management of Evergreen Corporation anticipates a 5 percent decrease in sales, a 10 percent increase in variable costs, and a $60,000 increase in fixed costs.

Question 1: The break-even point for next year would be