The Amazing Drug Company has four lines of drugs (Goofy, Dooty, Woofy, & Poofy). Anson and...

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The Amazing Drug Company has four lines of drugs (Goofy, Dooty, Woofy, & Poofy). Anson and Anika both work as accountants at the Amazing Drug Company. Anson determined that 20,000 units of Goofy, 60,000 units of Doofy, 50,000 units of Woofy, and 80,000 units of Poofy would be sold in the coming period. Anika came up with the following cost information for each product: Goofy: $8 price per unit and a 40% variable cost ratio; fixed costs are S547,158.23. Doofy: $14.44 price per unit and a $6.60 contribution margin per unit; fixed costs are combined with Poofy. • Woofy: $12.60 variable cost per unit and a 30% contribution margin ratio; fixed costs are $351,124.35. • . . Poofy: $9.24 price per unit and $1.54 variable cost per unit; fixed costs are combined with Doofy and total $612,418,82. Required: 1. Assuming the company maintains its current sales mix, what would be the company's breakeven point in units per product and in total? 2. What is operating income at the current level of sales (show an income statement)? 3. What would operating income be if the company sold 19% fewer units of Goofy and Poofy, but was able to increase sales of Doofy and Woofy by 81% (show an income statement)? The Amazing Drug Company has four lines of drugs (Goofy, Dooty, Woofy, & Poofy). Anson and Anika both work as accountants at the Amazing Drug Company. Anson determined that 20,000 units of Goofy, 60,000 units of Doofy, 50,000 units of Woofy, and 80,000 units of Poofy would be sold in the coming period. Anika came up with the following cost information for each product: Goofy: $8 price per unit and a 40% variable cost ratio; fixed costs are S547,158.23. Doofy: $14.44 price per unit and a $6.60 contribution margin per unit; fixed costs are combined with Poofy. • Woofy: $12.60 variable cost per unit and a 30% contribution margin ratio; fixed costs are $351,124.35. • . . Poofy: $9.24 price per unit and $1.54 variable cost per unit; fixed costs are combined with Doofy and total $612,418,82. Required: 1. Assuming the company maintains its current sales mix, what would be the company's breakeven point in units per product and in total? 2. What is operating income at the current level of sales (show an income statement)? 3. What would operating income be if the company sold 19% fewer units of Goofy and Poofy, but was able to increase sales of Doofy and Woofy by 81% (show an income statement)?

Answer rating: 100% (QA)

1 To calculate the companys breakeven point in units and in total we need to determine the total contribution margin for each product line and then divide the fixed costs by the weighted average contr... View the full answer