Ironjay, Inc., produces two types of weight-training equipment: the Jay-flex (a weight machine that allows the user to perform a number of different exercises) and a set of free weights. Ironjay sells the Jay-flex to sporting goods stores for $200. The free weights sell for $75 per set. The projected income statement for the coming year follows:

Sales $600.000 Less: Variable expenses 390,000 Contribution margin $210,000 Less: Fixed expenses 157.500 Operating income $ 52.500