The Stapleton 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 muirements. Requirement 1. What is the current annual operating income? [a] Start by determining the formula to calculate operating income. I x( )] = Operating income The current annual operating income is $ (b) What is the cunent breakeven point in revenues? Determine the formula to calculate the breakeven point in revenues. Breakeven revenues The current breakeven point in revenues equal 5 Compute the new operating income for requirements 2 through 4. Requirement 2. ASOJD per unit increase in variable costs results in a new operating of S Requirement 3. A 10% increase in xed costs and a 10% increase in untis sold results in a new operating of S Requirement 4. A20% decrease in xed costs, 20% decrease in selling pn'ce, a 30% decrease in variable cost per unit, and a 45% increase in unils sold results in a new operating of S Compute the new breekeven point in units for requirements 5 and 6. Requirement 5. A 10% increase in xed costs creates a new breekeven point at units. Raqul remant IE. A109": increase in selling price and a $30,000 increase in xed costs creates a new breakewen pcini at :l units. 0 Requirements Ccnsider each case separately: 1. a. What is the current annual cperating inccrrie'lI b. 1lr'ul'hat is the current breeketren pcint in revenues? Ccmpute the new cperating inccrne fcr each cf the fcllcwing changes: 2. A $D.1D per unit increase in 1irariehle ccsts 3. A was increase in xed ccsts and a 10% increase in units scld 4. A Eil: decrease in xed ccsts, e 2% decrease in selling priceI a 313% decrease in variable ccst per unitr and e 45% increase in units scld Ccmpute the new breeitetren paint in units fer each cf the fcllcwing changes: 5. A1DEIE increase in xed ccsts E. A was increase in selling price and e $3L'l increase in xed ccsts