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Question - The Doral Company manufactures and sells pens. Currently, 5,000,000 units are sold per year at $0.50 per unit. Fixed costs are $900,000 per year. Variable costs are $0.30 per unit Consider each case separately:
a. What is the current annual operating income?
b. What is the present breakeven point in revenues?
Compute the new operating income for each of the following changes:
2. A $0.04 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 10% decrease in variable cost per.
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