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3. The Doral Company manufactures and sells pens. Data on Doral's operations is as follows: annual sales 5,000,000 pens $ 0.50 selling price per pen
3. The Doral Company manufactures and sells pens. Data on Doral's operations is as follows: annual sales 5,000,000 pens $ 0.50 selling price per pen variable costs per pen annual fixed costs $ 0.30 $900,000 a) What is Doral's current yearly operating income? b) What is the current breakeven point in sales dollars? c) Compute the new operating income if there was a $0.04 per-unit increase in variable costs. d) Compute the new operating income if there was a 20% decrease in fixed costs, a 20% decrease in selling price, a 10% decrease in variable costs, and a 40% increase in units sold. e) Assuming the original unit sales, price, and variable cost data, compute the new breakeven point in units for a 10% increase in fixed costs. f) Assuming the original unit sales and variable cost data, compute the new breakeven point in units for a 10% increase in selling price and a $20,000 increase in fixed costs
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