(E3-20 Similar to) The Doral Company manufactures and sells pens. Currently, 5,300,000 units are sold per year at $0.50 per unit. Fixed costs are $900,000 per year. Variable costs are $0.30 per unit.

Consider each case separately: 1. a. What is the current annual operating income? b. What is the present breakeven point in revenues? af the following changes: 2. 3. 4. A $0.08 per unit increase in variable costs A 10% increase in fixed costs and a 10% increase in units sold A 20% decrease in fixed costs, a 20% decrease in selling price, a 30% decrease in variable cost per unit, and a 35% increase in units sold Compute the new breakeven point in units for each of the following changes: 5. A 10% increase in fixed costs 6. A 10% increase in selling price and a $20,000 increase in fixed costs