Use the information below to answer the following question(s).The following information is for Winnie Company:

-What is the operating income assuming actual sales are 300,000 units, and the sales mix is one unit of Product A and two units of Product B?

Question

Use the information below to answer the following question(s).The following information is for Winnie Company:
 
-What is the operating income assuming actual sales are 300,000 units, and the sales mix is one unit of Product A and two units of Product B?

Quizplus · Accepted Answer

To calculate the operating income, we need to first find the contribution margin per unit for Product A and Product B.

Product A:
Contribution margin per unit = $30 - $20 - $5 = $5

Product B:
Contribution margin per unit = $50 - $30 - $5 = $15

Next, we need to use the sales mix to calculate the weighted average contribution margin per unit.

Weighted average contribution margin per unit = (1 unit of A x $5) + (2 units of B x $15) / 3 units
= ($5 + $30) / 3
= $35 / 3
= $11.67

Finally, we can calculate the operating income:

Operating income = (300,000 units x $11.67) - $1,500,000
= $3,501,000 - $1,500,000
= $2,001,000

Therefore, the operating income assuming actual sales are 300,000 units, and the sales mix is one unit of Product A and two units of Product B is $2,001,000.

Option C is the correct answer.

Use the Information Below to Answer the Following Question(s)