The Doral company manufactures and sells pens. 5,600,000 units are sold per year at $0.50 per unit. Fixed costs are $870,000 per year. Variable costs = $0.30 per unit.

1. What is the current breakeven point in revenues?

2. A $0.05 per unit increase in variable costs results in a new operating (income or loss?) of $?

3. A 10% increase in fixed costs and a 10% increase in units sold results in a new operating (income or loss?) of $?

4. A 30% decrease in fixed costs, 30% decrease in selling price, a 20% decrease in variable cost per unit and a 40% increase in units sold results in a new operating (income or loss?) of $?

5. A 10% increase in fixed costs creates a new breakeven point at ???? units.

6. A 10% increase in selling price and a $40,000 increase in fixed costs creates a new breakeven point at ??? units

Answer rating: 100% (QA)

Doral Company Pen Manufacturing Analysis We can analyze Dorals profitability using the concepts of contribution margin and breakeven point 1 Current B... View the full answer