Business, 07.07.2021 21:20 chrisswid

Muscle Beach, Inc., makes three models of high-performance weight-training benches. Current operating data are summarized here: MegaMuscle PowerGym ProForce
Selling price per unit $141 $195 $283
Contribution margin per unit 43 76 59
Monthly sales 2,960 1,950 920
Fixed expenses per month Total $329,700
1 Management is considering the elimination of the ProForce model due to its low sales volume and low contribution margin ratio. As a result, total fixed expenses can be reduced to $281,750 per month. Assuming that this change would not affect the other models, what would be the effect on net operating income.
1 Assume also that the sales volume for the PowerGym model will increase by 507 units per month if the ProForce model is eliminated. What would be the effect on operating income?

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Muscle Beach, Inc., makes three models of high-performance weight-training benches. Current operatin...

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