Homework: chapter 3 HW Score: 11.25 of 20 pts & E3-25 (similar to) 3 of 6 (5 complete) The O'Reilly Company manufactures and sells pens. Currently 5,600,000 units are sold per year at $0 60 per unit Fixed costs are $890,000 per year. Variable costs are 50 40 per unit Read the requirements Requirements -X Requirement 1. What is the current annual operating income? (a) Start by determining the formula to calculate operating income 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 the costs and a 20% increase in units sold 4. A 40% decrease in fed costs, a 40% decrease in veling price a 30% decrease in variable cost per unit, and a 45% Increase in units sold Compute the new breakeven point in units for each of the following changes 5. A 20% Increase in fred costs 6. A 20% increase in soling price and a $20,000 Increase in costs Print Done Choose from any drop-down list and then click Check Answer 8 para remaining Call EH Type here to search ot Requirement 1. What is the current annual operating income? (a) Start by determining the formula to calculate operating income. )) Operating income The current annual operating income is $ (b) What is the current breakeven point in revenues? Determine the formula to calculate the breakeven point in revenues. Breakeven revenues of 5 The current breakeven point in ovenuen quals Compute the new operating income or loss for requirements 2 through 4. Requirement 2. A80 C4 per unit increase in variable costs results in a new operating lors Requirement 3 A 10% Increase in fixed costs and a 10% Increase in untis sold results in a new operating Requirement 4 A 20% decrease in fixed costs, 20% decrease in selling price, a 10% decrease in variable cost per unit, and a 40% increase in units sold results in a new operating Compute the new breakeven point in units for requirements 5 and 6. Requirements A 10% Increase in fixed costs creates a new breakeven point at Requirement 6 A 10% increase in selling price and a $20.000 increase in faced costs creates a new breakeven point at of $ units