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Conquistador Hurricane Sales price $5,000 $3,200 Variable cost of goods sold (3,150) (2,140) $1,850 $1,060 Manufacturing margin Variable selling expenses (750) (420) Contribution margin $1,100

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Conquistador Hurricane Sales price $5,000 $3,200 Variable cost of goods sold (3,150) (2,140) $1,850 $1,060 Manufacturing margin Variable selling expenses (750) (420) Contribution margin $1,100 $640 Fixed expenses (520) (260) Operating income $580 $380 In addition, the following sales unit volume information for the period is as follows: Conquistador Hurricane Sales unit volume 3,500 2,500 a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each product as a whole percent. Galaxy Sports Inc. Contribution Margin by Product Conquistador Hurricane $ % % b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products? line, the overall The line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix were shifted more toward the profitability of the company would increase

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