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 worker. Thus, variable costs are high, totalling $2480 per skateboard, of which 70% is direct labour cost Over the past year the company sold 551000 skateboards, with the following operating results: Sales (551000 skateboards) Variable expenses 1 13471500 Contribution margin 5771500 Fixed expenses 4721500 Net operating income Management is anxious to maintain and perhaps even improve its present level of income from the skateboard.