You are the manager of a small pharmaceutical company that received a patent on a new drug three years ago. despite strong sales ($150 million last year) and a low marginal cost of producing the product ($0.80 per pill), your company has yet to show a profit from selling the drug. this is, in part, due to the fact that the company spent $1.6 billion developing the drug and obtaining fda approval. an economist has estimated that, at the current price of $1.75 per pill, the own price elasticity of demand for the drug is -2.5.
based on this information, what can you do to boost profits?

Exercise 6-2 variable costing income statement; explanation of difference in net operating income [lo6-2] ida sidha karya company is a family-owned company located on the island of bali in indonesia. the company produces a handcrafted balinese musical instrument called a gamelan that is similar to a xylophone. the gamelans are sold for $970. selected data for the company’s operations last year follow: units in beginning inventory 0 units produced 200 units sold 180 units in ending inventory 20 variable costs per unit: direct materials $ 130 direct labor $ 300 variable manufacturing overhead $ 30 variable selling and administrative $ 15 fixed costs: fixed manufacturing overhead $ 63,000 fixed selling and administrative $ 25,000 the absorption costing income statement prepared by the company’s accountant for last year appears below: sales $ 174,600 cost of goods sold 139,500 gross margin 35,100 selling and administrative expense 27,700 net operating income $ 7,400 required: 1. under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. prepare an income statement for last year using variable costing.