Problem:

The following relationships exist for Dellva Industries, a manufacturer of electronic components. Each unit of output it sold for $45; the fixed costs are $175,000, of which $110,000 is annual depreciation charges; and variable costs are $20 per unit.

Required:

Question 1: What is Dellva's operating break-even point?

Question 2: What would happen to the operating breakeven point if Dellva raises the product selling price to $50, which will cause the variable cost per unit to rise to $22.

Note: Please provide through step by step calculations.