Cost volume profit, breakeven, decision to drop a product, special offer, and product mix decisions (requires knowledge of linear programming) Birthday Gems (BG) makes plush toys that are popular birthday gifts. The following table provides information on the three prod- ucts BG produces and expected sales level for the upcoming year: Per-Unit Information RABBIT DEER BEAR Selling price Variable cost. Contribution margin $55.00 43.00 $12.00 $66.00 55.00 $11.00 $84.00 76.00 $ 8.00 Planned unit sales ... 90,000 60,000 50,000 The BG accountant has provided you with the following information about fixed costs: RABBIT DEER BEAR TOTAL Fixed costs Attributable fixed cost ..... Allocated fixed cost... Total $800,000 108,000 $908,000 $500,000 72,000 $572,000 $450,000 60,000 $510,000 $1,750,000 240,000 $1,990,000 Required (a) Prepare an income statement that shows the income for each of the three products and a total for the entire organization. (b) If the sales mix remains constant as total sales increase or decrease, compute the sales of each product required so that total BG income is zero. (c) Matt Reasoner has grown tired of the losses reported by the Bear product and wants to eliminate it. The marketing manager has objected, saying that, because the three products are sometimes sold as a package, sales of the Rabbit and Deer products will fall by 2% if the Bear product is eliminated. What is the effect on BG's total income if the Bear product is dropped