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The Garret Company manufactures and sells pens. Currently, 5,300,000 units are sold per year at $0.60 per unit. Fixed costs are $880,000 per year. Variable costs are $0.40 per unit. Read the requirements. Requirement 1. What is the current annual operating income? (a) Start by determining the formula to calculate operating income. 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 \$0.04 per unit increase in variable costs 3. A 10% increase in foxed costs and a 10% 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 10% increase in fixed costs 6. A 10% increase in selling price and a $30,000 increase in fixed costs The Garret Company manufactures and sells pens. Currently, 5,300,000 units are sold per year at $0.60 per unit. Fixed costs are $880,000 per year. Variable costs are $0.40 per unit. Read the requirements. Requirement 1. What is the current annual operating income? (a) Start by determining the formula to calculate operating income. 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 \$0.04 per unit increase in variable costs 3. A 10% increase in foxed costs and a 10% 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 10% increase in fixed costs 6. A 10% increase in selling price and a $30,000 increase in fixed costs