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Homework answers / question archive / Muscle Beach, Inc
Muscle Beach, Inc., makes three models of highperformance weighttraining benches. Current operating data are summarized here:

MegaMuscle 
PowerGym 
ProForce 

Selling price per unit 
$ 
149 

$ 
208 

$ 
294 

Contribution margin per unit 

41 


75 


56 

Monthly sales volume—units 

2,990 


2,080 


950 

Fixed expenses per month 


Total of $317,900 
a. 
Calculate the contribution margin ratio of each product. (Round your answers to 1 decimal place.) 
b. 
Calculate the firm's overall contribution margin ratio. (Round your answer to 1 decimal place.) 
c. 
Calculate the firm's monthly breakeven point in sales dollars. (Round your intermediate calculations to 1 decimal place and final answer to the nearest whole dollar.) 
d. 
Calculate the firm's monthly operating income. 
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 $272,070 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 elimination of the ProForce model? 


f.1 
Assume the same facts as in requirement 5. Assume also that the sales volume for the PowerGym model will increase by 509 units per month if the ProForce model is eliminated. What would be the effect on operating income. 
f.2 
Would you recommend eliminating the ProForce model? 


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