Thomas Manufacturing Inc (TMI) is suffering from the effects of increased local and global competition for its main product, an office chair that is sold in discount stores throughout american. The following table shows the results of TMI's operations for the most recent year:

Sales (12,500 units @ $ 84) $ 1,050,000 Variable costs (12,500 @$ 63) $ 787,500 Contribution margin $ 262,500 Fixed costs $ 296,100 Operating profit (loss) ($ 33,600)