Consider each case separately: 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 $0.08 per unit increase in variable costs 3. a 10% increase in fixed costs and a 10% increase in units sold 4. a 20% decrease in fixed costs, a 20% decrease in selling price, a 30% 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: 5. a 10% increase in fixed costs 6. a 10% increase in selling price and a $ 30 comma 000 increase in fixed costs

Instructions are listed below

Explanation:

We don't have enough information to answer the question numerically. But, I can provide a few formulas of how to answer it.

A)

Revenue/Sales (+)

Cost of Goods Sold (COGS) (-)

=Gross Profit

Marketing, Advertising, and Promotion Expenses (-)

General and Administrative (G&A) Expenses (-)

=Net operating income

B)Break-even point (dollars) fixed costs/ contribution margin ratio

Contribution margin ratio= (Price - unitary variable cost)/Price

1) Increase in Unitary variable cost:

Contribution margin= price - new unitary variable cost

2) Variance in income= new sales* contribution margin - increase in fixed costs

3) Prepare the income statement again

C) Break-even point= fixed costs/ contribution margin

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