Sales (41,000 skateboards) $1,435,000 Variable expenses 861,000 Contribution margin 574,000 Fixed expenses 420,000 Net operating income $ 154,000

Tyrene Products manufactures recreational equipment. One of the company's products, a skateboard, sells for $35. The skateboards are manufactured in an antiquated plant that relies heavily on direct labour workers. Thus, variable costs are high, totalling $21.00 per skateboard, of which 60% is direct labour cost.

     Over the past year the company sold 41,000 skateboards, with the following operating results:

• Attachment 1
• Attachment 2

Sales (41,000 skateboards) $1,435,000 Variable expenses 861,000Contribution margin 574,000Fixed expenses 420,000 Net operating income $ 154,000