The weber Company manufactures and sells pens. Currently, 5,500,000units are sold per year a t$0.60 per unit. Fixed costs are$ 860,000 per year. Variable costs are $0.40per unit.

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) ] -Fixed costs=Operating income

The current annual operating income is 240,000

) What is the current breakeven point in revenues?

Determine the formula to calculate the breakeven point in revenues.

= Breakeven revenues