Obed Corp Makes Three Models of High Performance Cross Country Ski

question 29

Essay

Obed Corp. makes three models of high performance cross country ski machines. Current operating data are summarized below:
Fixed expenses per month total $185,820
(a) Calculate the contribution margin ratio for each product.(b) Calculate the firm's overall contribution margin ratio.(c) Calculate the firm's break-even point in sales dollar.(d) Calculate the firm's operating income.(e) Management is considering the elimination of the OurSki model due to low sales volume. As a result, total fixed expenses can be reduced by $60,000 per month. Assuming that this change would not affect the other models, would you recommend the elimination of the OurSki model?

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Definitions:

Adversarial Labor-Management Relations

A relationship between labor unions and management characterized by conflict and opposition, often leading to strikes and labor disputes.

Union Suppression

Strategies or actions taken by employers to discourage unionization or diminish the influence of unions within their organization.

Racism

Prejudice, discrimination, or antagonism directed against someone of a different race based on the belief that one's own race is superior.

Discrimination

Unfair or unequal treatment of individuals based on characteristics such as race, gender, age, or sexual orientation, contrary to principles of equality and justice.