Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

provide calculations please The Brewer Company manufactures and sells pens. Currently, 5,100,000 units are sold per year at $0.60 per unit. Fixed costs are $880,000

image text in transcribedimage text in transcribed

provide calculations please

The Brewer Company manufactures and sells pens. Currently, 5,100,000 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. [ Units sold * Selling price Variable costs D] - Fixed costs = Operating income The current annual operating income is $ 140,000 (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 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 $0.10 per unit increase in variable costs 3. A 10% increase in fixed costs and a 10% increase in units sold 4. A 20% decrease in fixed costs, a 20% decrease in selling price, a 30% decrease in variable cost per unit, and a 40% 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Tools For Business Decision Making

Authors: Paul D. Kimmel

3rd Canadian Edition

0470836792, 978-0470836798

More Books

Students also viewed these Accounting questions

Question

Were the participants sensitized by taking a posttest?

Answered: 1 week ago

Question

Calculate the cost per hire for each recruitment source.

Answered: 1 week ago

Question

What might be some advantages of using mobile recruiting?

Answered: 1 week ago

Question

What external methods of recruitment are available?

Answered: 1 week ago