Requirements

Consider each case separately:

$1.$ a$.$ What is the current annual operating income?

b$.$ What is the present break even point in revenues?

Compute the new operating income or loss for each of the following changes:

$2.$ A

KES$\mathrm{.}0\mathrm{.}06$

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

$35\%$

increase in units sold.

Compute the new break even 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

KES$\mathrm{.}40,000$

increase in fixed costs.