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# The Morrison Company manufactures and sells pens Currently, 5,000,000 units are sold per year at \$ 0.50 per unit. Fixed costs are \$ 1 comma 140,000 per year. Variable costs are \$ 0.20 per unit.

The Morrison Company manufactures and sells pens.â Currently, 5,000,000 units are sold per year at \$ 0.50 per unit. Fixed costs are \$ 1 comma 140,000 per year. Variable costs are \$ 0.20 per unit.

Consider each caseâ separately:

 1. a. What is the current annual operatingâ income? b. What is the current breakeven point inâ revenues?

Compute the new operating income or loss for each of the followingâ changes:

2. A \$0.80 per unit increase in variable cost.

3. A 20% increase in fixed costs and a 20% increase in units sold.

4. A 40% decrease in fixed costs, a 40% decrease in selling price, a 10% decrease in variable cost per unit. and a 45% increase in units sold.

Compute the new breakeven point in units for each of the followingâ changes:

5. A 20% increase in fixed costs.

6. A 20% increase in selling price and a \$10,000 increase in fixed costs.

Aug 10 2021 View more View Less