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1 The Doral Company manufactures and sells pens. Currently, 5 million units are sold at a price of $0.50 per unit. Fixed costs are $900,000
1 The Doral Company manufactures and sells pens. Currently, 5 million units are sold at a price of $0.50 per unit. Fixed costs are $900,000 per year, and variable costs are $0.30 per unit If the tax rate is currently 30%, determine the following: Required: a. Operating income b. Net income c. Breakeven point in units and dollars d. Margin of safety in units and dollars Using the same information as above, calculate operating income given the following changes: Seenaus a. A $0.04 per unit increase in variable cost a00 000 b. A 10% increase in fixed costs and a 15% increase in units sold (5,000,000) c. A 20% decrease in fixed costs, a 15% decrease in variable costs and a 20% increase in selling price. Question 2
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