The Unique Toys Company manufactures and sells toys. Currently, 300,000 units are sold per year at $12.50 per unit. Fixed costs are $880,000 per year. Variable costs are $7.00 per unit. (Consider each case separately.)

Required

1. a. What is the current annual operating income?
b. What is the present breakeven point in revenues?
Compute the new operating income for each of the following changes:
2. A 10% increase in variable costs
3. A $250,000 increase in fixed costs and a 2% increase in units sold
4. A 10% decrease in fixed costs, a 10% decrease in selling price, a 10% increase in variable cost per unit,  and a 25% increase in units sold Compute the new breakeven point in units for each of the following changes:
5. A 20% increase in fixed costs
6. A 12% increase in selling price and a $30,000 increase in fixed costs