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Break.Even In Units, Target Incorne, New Unit Variable Cost, Degree of Operating Leverage, Percent Change in Operating Income Reagan, Inc., has developed a chew-proof dog bed-the Tuff-pup. Fixed costs are 5160,000 per year, The average price for the Tuff-Pup is 535 , and the average variable cost is $25 per unit, Currently, Reagan produces and sells 20,000 Tuff-Pups annually. Required: 1. How many Tuff-Pups must be sold to break even? units. 2. If Reagan wants to earn $55,000 in profi, how mary Tulf-Pups must be sold? units Prepare a variable-costing income statement to verify your answer. 3. Supgose that Rhesgan would tike to lewer the break-even units to 8,000. The company does not believe that the price or fixed cost can be changed. caiculate the new unit variable cost that would result in break tven units of 8,000 . If required, round your intermediate computations and finat answer to the nearest cent. 4. What is Reagan's current contrbution margin and operatina incomn? 3. Suppose that Reagan would like to lower the break-even units to 8,000. The company does not believe that the price or fixed cost can be changed. Calculate the new. unit variable cost that would refult in break-even units of 8,000. If required, round your intermediate computations and final answer to the nearest cent. 4. What is Reagan's current contribution margin and operating income? Current contribution margin Current operating income Culculate the degree of operating leverage. Round your answer to three decimal places. If sales increased by 10 percent next year, what would the percent change in operating income be? Use your rounded answer to the question above in your computations, and round your final percentage answer to two decimal places (for example, 45.555% would be entered as "45.56"). What would the new total operating income for next year be? Round your answer to the nearest dollar. 5. Resgan, thc, has used dato on the Tuff-Pup to answer a number of different questions, tdentify the data analytic type (descriptive, diagnostic, predictive, or presoriptive) that Reagan used to answer these questions. (See Exhibits 2.5 and 2.6, for a review of dota analytic types: Mote: More than one analytic type might apply.) Aeagan understand the break-even point and units needed to earn a target profic. Diagnostic = anslysis helps Reagan to undertand what happens when variables are changed Predictive analysis would be uted it Reagan determines that a target profit must be earned and then uses the data to change price, variable cost, and fived Preseriptive proft. Data analytics would be used in Requirement 3 as Reagan decles to lawer the break even point and uses the anolvis to determine why the breakeven is higher than desired