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Muscle Beach Incorporated makes three models of high-performance weight-training benches. Current operating data are summarized here: Selling price per unit Contribution margin per unit
Muscle Beach Incorporated makes three models of high-performance weight-training benches. Current operating data are summarized here: Selling price per unit Contribution margin per unit Monthly sales volume-units MegaMuscle $146 41 PowerGym 3,080 Fixed expenses per month $197 76 1,950 Total of $320,600 ProForce $ 290 58 980 Required: a. Calculate the contribution margin ratio of each product. b. Calculate the firm's overall contribution margin ratio. c. Calculate the firm's monthly breakeven point in sales dollars. d. Calculate the firm's monthly operating income. e. 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 $272,410 per month. Assuming that this change would not affect the other models, what would be the effect on net operating income. Would you recommend the elimination of the ProForce model? f. Assume the same facts as in requirement e-1. Assume also that the sales volume for the PowerGym model will increase by 508 units per month if the ProForce model is eliminated. What would be the effect on operating income. Would you recommend eliminating the ProForce model? Complete this question by entering your answers in the tabs below. Required A Required C Required D Required E1 Required E2 Required F1 Required F2 Required B Calculate the contribution margin ratio of each product. Note: Round your answers to 1 decimal place. Contribution margin ratio MegaMuscle PowerGym ProForce
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