e-1. 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 $271,670 per month. Assuming that this change would not affect the other models, what would be the effect on net operating income.

e-2. Would you recommend the elimination of the ProForce model?

	Yes
	No

f-1. Assume the same facts as in requirement e-1. Assume also that the sales volume for the PowerGym model will increase by 500 units per month if the ProForce model is eliminated. What would be the effect on operating income.

Net operating income will...decrease by/increase by..._________

f-2. Would you recommend eliminating the ProForce model?

	Yes
	No

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Muscle Beach, Inc., makes three models of high-performance weight-training benches. Current operating data are summarized here: TIT PowerGym MegaMuscle $ 146 42 2,920 ProForce $ 283 57 920 $ Selling price per unit Contribution margin per unit Monthly sales volume-units Fixed expenses per month 198 79 1,910 Total of $320,000 a. Calculate the contribution margin ratio of each product. (Round your answers to 1 decimal place.) MegaMuscle PowerGym ProForce Contribution margin ratio 20.1% 28.7 % 39.9 % b. Calculate the firm's overall contribution margin ratio. (Round your answer to 1 decimal place.) Overall CM ratio 30.6 % c. Calculate the firm's monthly break-even point in sales dollars. (Round your intermediate calculations to 1 decimal place.) Break-even point d. Calculate the firm's monthly operating income. Operating income .... Muscle Beach, Inc., makes three models of high-performance weight-training benches. Current operating data are summarized here: TIT PowerGym MegaMuscle $ 146 42 2,920 ProForce $ 283 57 920 $ Selling price per unit Contribution margin per unit Monthly sales volume-units Fixed expenses per month 198 79 1,910 Total of $320,000 a. Calculate the contribution margin ratio of each product. (Round your answers to 1 decimal place.) MegaMuscle PowerGym ProForce Contribution margin ratio 20.1% 28.7 % 39.9 % b. Calculate the firm's overall contribution margin ratio. (Round your answer to 1 decimal place.) Overall CM ratio 30.6 % c. Calculate the firm's monthly break-even point in sales dollars. (Round your intermediate calculations to 1 decimal place.) Break-even point d. Calculate the firm's monthly operating income. Operating income ....

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