The
Westover
Company manufactures and sells pens. Present sales output is
5,300,000
units per year at a selling price of
$0.50
per unit. Fixed costs are
$910,000
per year. Variable costs are
$0.30
per unit.Required
LOADING...
Requirement 1.? (a) What is the present operating income for a?year?
Start by determining the formula to calculate operatingincome.
[ | Units sold | x ( | Selling price | - | Variable costs | ) ] - | Fixed costs | = | Operating income |
The current annual operating income is
?$150000150000.
Requirement 1.? (b) What is the present breakeven point in?revenues?
Determine the formula to calculate the breakeven point inrevenues.
Breakeven units | x | Selling price | = | Breakeven revenues |
The present breakeven point in revenues equals
?$22750002275000.
?(Hold all decimals in interim calculations. Round your finalanswer to the nearest whole? dollar.)
Requirement 2. Compute the new operating income or loss forcases? a, b, and c. ?(Use parentheses or a minus sign to show anoperating? loss.)
a. A
$0.05
per unit increase in variable costs results in a new operatingincome or loss of
?$(115,000)(115,000).
b. A
10?%
increase in fixed costs and a
10?%
increase in units sold results in a new operating income or lossof
?$nothing.
please send me the whole answer
