Question

Tyrene Products manufactures recreational equipment. One of the company’s products, a skateboard, sells for $37. The skateboards are manufactured in an antiquated plant that relies heavily on direct labour workers. Thus, variable costs are high, totalling $25.90 per skateboard, of which 70% is direct labour cost. Over the past year the company sold 43,000 skateboards, with the following operating results: Sales (43,000 skateboards) $ 1,591,000 Variable expenses 1,113,700 Contribution margin 477,300 Fixed expenses 277,500 Net operating income $ 199,800

Answer 1

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