The St. John Company manufactures and sells pens. Currently, 5,500,000 units are sold per year at $0.50 per unit. Fixed costs are $910,000 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 x Selling price Variable costs D] - Fixed costs Operating income The current annual operating income is $ 190,000 Requirements (b) What is the current breakeven point in revenues? Determine the formula to calculate the breakeven point in revenues Breakeven units x Selling price Breakeven revenues The current breakeven point in revenues equal $ 2,275,000 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 10% increase in fixed costs and a 10% increase in units sold 4. A 30% decrease in fixed costs, a 30% decrease in selling price, a 20% 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 $10,000 increase in fixed costs 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 loss of $ (250,000) Requirement 3. A 10% increase in fixed costs and a 10% increase in untis sold results in a new operating income of $ 209,000 Print Done Requirement 4. A 30% decrease in fixed costs, 30% decrease in selling price, a 20% decrease in variable cost per unit, and a 40% increase in units sold results in a new operating of