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question 5 Sunshine Company manufactures and sells pens. Currently, 6,000,000 units are sold per year...

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Accounting

question 5 Sunshine Company manufactures and sells pens. Currently, 6,000,000 units are sold per year at $0.70 per unit. Fixed costs are $980,000 per year. Variable costs are $0.30 per unit.
Consider each case separately:
Required:
1. 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:
2. A $0.03 per unit increase in variable costs
3. A 12% increase in fixed costs and a 10% increase in units sold
4. A 18% decrease in fixed costs, a 20% decrease in selling price, a 10% decrease in variable
cost per unit, and a 40% increase in units sold
Compute the new breakeven point in units for each of the following changes:
4. A 10% increase in fixed costs
5. A 10% increase in selling price and a $20,000 increase in fixed costs

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