Requirements

Consider each case separately:

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:

$A$$$0\mathrm{.}10$ per unit increase in variable costs

A $20\%$ increase in fixed costs and a $20\%$ increase in units sold

A $30\%$ decrease in fixed costs, a $30\%$ decrease in selling price, a $10\%$

decrease in variable cost per unit, and a $35\%$ increase in units sold

Compute the new breakeven point in units for each of the following changes:

A $20\%$ increase in fixed costs

A $20\%$ increase in selling price and a $$10,000$ increase in fixed costs