Answer Happy

Question Four (10 Marks) Tyrene Products manufactures recreational equipment. One of the company's products, a skateboard, sells for $37.50. The skateboards are manufactured in an antiquated plant that relies heavily on direct labor workers. Thus, variable costs are high, totaling $22.50 per skateboard of which 60% is direct labor cost. Over the past year, the company sold 40,000 skateboards, with the following operating results: Sales (40,000 skateboards). Variable expenses. Contribution margin. Fixed expenses Net operating income. $1,500,000 900,000 600,000 480,000 $120.000 Required: 1. Compute (a) the CM ratio and the break-even point in skateboards, and (b) the degree of operating leverage at last year's level of sales. (3 pts) onu actimates that variable costs will increase by