er Te Te Requirements Consider each case separately: 1. a. What is the current annual operating income? b. What is the current breakeven point in revenues? Compute the new operating income for each of the following changes: 2. A $0.08 per unit increase in variable costs 3. A 20% increase in fixed costs and a 20% increase in units sold 4. A 40% decrease in fixed costs, a 40% 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 20% increase in fixed costs 6. A 20% increase in selling price and a $40,000 increase in fixed costs e increase in fixed costs Print Done - possible The St. John Company manufactures and sells pens. Currently, 5,400,000 units are sold per year at $0.50 per unit. Fixed costs are $950,000 per year. Variable costs are $0.30 per unit. Read the equirement Requirement 1. What is the current annual operating income? (a) Start by determining the formula to calculate operating income. Units sold Selling price Variable costs 01- Fixed costs Operating income The current annual operating income is 130,000 (b) What is the current breakeven point in revenues? Determine the formula to calculate the breakeven point in revenues. Breakeven units Selling price Breakeven revenues The current breakeven point in revenues equal Compute the new operating income for requirements 2 through 4. Requirement 2. A $0.08 per unit increase in variable costs results in a new operating Requirement 3. A of A 20% increase in fixed costs and a 20% increase in untis sold results in a new operating of The St. John Company manufactures and sells pens. Currently, 5,400,000 units are sold per year at $0.50 per unit. Fixed costs are $950,000 per year. Variable costs are $0.30 per unit. Read the requirements. Requirement 1. What is the current annual operating income? (a) Start by determining the formula to calculate operating income. Units sold Selling price Variable costs )]- Fixed costs =Operating income 130,000 TH (b) Breakeven units De Co Fixed costs Selling price Units sold Re Variable costs come is en point in revenues? late the breakeven point in revenues. x revenues equal Selling price come for requirements 2 through 4. A $0.08 per unit increase in variable costs results in a new operating Requirement 3. = Breakeven revenues A 20% increase in fixed costs and a 20% increase in untis sold results in a new operating of of The St. John Company manufactures and sells pens. Currently, 5,400,000 units are sold per year at $0.50 per unit. Fixed costs are $950,000 per year. Variable costs are $0.30 per unit. Read the requirements. Compute the new operating income for requirements 2 through 4. Requirement 2. A $0.08 per unit increase in variable costs results in a new operating Requirement 3. of A 20% increase in fixed costs and a 20% increase in untis sold results in a new operating Requirement 4. of A 40% decrease in fixed costs, 40% decrease in selling price, a 30% decrease in variable cost per unit, and a 35% increase in units sold results in a new operating of Compute the new breakeven point in units for requirements 5 and 6. Requirement 5. A 20% increase in fixed costs creates a new breakeven point at Requirement 6. units. A 20% increase in selling price and a $40,000 increase in fixed costs creates a new breakeven point at units