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 $ 3,500,000 Cost of sales: Direct Material $ 500,000 Direct labor 250,000 Variable Overhead 275,000 Fixed Overhead 600,000 1,625,000 Gross Profit $ 1,875,000 Selling and General & Admin. Exp. Variable 750,000 Fixed 250,000 1,000,000 Operating Income $ 875,000For the coming year, the management of Evergreen Corporation anticipates a 5 percent decrease in sales, a 10 percent increase in variable costs, and a $45,000 increase in fixed costs. The break-even point for next year would be: $2,668,750. $2,168,225. $3,022,500. $2,947,500.
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 $ 3,500,000
Cost of sales:
Direct Material $ 500,000
Direct labor 250,000
Variable
Fixed Overhead 600,000 1,625,000
Gross Profit $ 1,875,000
Selling and General & Admin. Exp.
Variable 750,000
Fixed 250,000 1,000,000
Operating Income $ 875,000For the coming year, the management of Evergreen Corporation anticipates a 5 percent decrease in sales, a 10 percent increase in variable costs, and a $45,000 increase in fixed costs.
The break-even point for next year would be:
$2,668,750.
$2,168,225.
$3,022,500.
$2,947,500.
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