The Brewer Company manufactures and sells pens. Currently, 5,300,000 units are sold per year at $0.50 per unit. Fixed costs are $900,000 per year. Variable costs are $0.30 per unit Read the requirements. Requirements Requireme (a) Start by Operating income 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 40% decrease in fixed costs, a 40% decrease in selling price, a 30% decrease in variable cost per unit, and a 45% 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 $20,000 increase in fixed costs Print Done Done 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 - Fixed costs - Operating income The current annual operating income is S (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 Compute the new operating income for requirements 2 through 4. Requirement 2. A $0.06 per unit increase in variable costs results in a new operating of S Requirement 3. A 10% increase in fixed costs and a 10% increase in untis sold results in a new operating of Requirement 4. A 20% decrease in fixed costs, 20% decrease in selling price, a 30% decrease in variable cost per unit, and a 35% increase in units sold results in a new operating of s Compute the new breakeven point in units for requirements 5 and 6. Requirement 5. A 10% increase in fixed costs creates a new breakeven point at units. Requirement 6. A 10% increase in selling price and a $30,000 increase in fixed costs creates a new breakeven point at units