Jim Bowden, the owner of Bowden Brake Service, plans to expand his six-year-old brake service to include tune-ups and tire services. Based on budget estimates for the upcoming year, Jim expects net sales to be $825,000 with a cost of goods sold of $530,000 and total operating expenses of $210,000. From his budget, Jim computes fixed expenses to be $168,000, while variable expenses (including the cost of goods sold) are $572,000. Jim is concerned that the new cost structure may damage his ability to produce a profit, and he wants to perform a break-even analysis for the upcoming year to gain insight. 7. If Jim were to reduce his fixed costs by 10 percent by eliminating a middle management position, what benefit would that be to him and the company? What would his new contribution margin be?