Galaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Conquistador and Hurricane, from a single manufacturing facility. The manufacturing facility operates at 100% of capacity. The following per-unit information is available for the two products:

	Conquistador	Hurricane
Sales price	$6,400		$4,200
Variable cost of goods sold	(4,030)		(2,810)
Manufacturing margin	$2,370		$1,390
Variable selling expenses	(1,154)		(718)
Contribution margin	$1,216		$672
Fixed expenses	(570)		(270)
Operating income	$646		$402

In addition, the following sales unit volume information for the period is as follows:

	Conquistador	Hurricane
Sales unit volume	2,800		2,000

a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each product as a whole percent.

	Conquistador	Hurricane
Contribution margin / Cost of goods sold / Direct labor / Gross profit / Sales	$	$
Fixed cost of goods sold / Fixed selling expenses / Manufacturing margin / SalesVariable cost of goods sold
Contribution margin / Cost of goods sold / Fixed manufacturing costs / Gross profit / Manufacturing margin	$	$
Fixed cost of goods sold / Fixed selling expenses / Manufacturing margin / SalesVariable selling expenses
Contribution margin / Cost of goods manufactured / Fixed manufacturing costs / Fixed sales / Manufacturing margin	$	$
Contribution margin ratio / Fixed manufacturing costs / Fixed sales / Manufacturing margin / Variable cost of goods sold	%	%

b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products?

The (Conquistad or Hurricane) line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix were shifted more toward the (Conquistad or Hurricane) line, the overall profitability of the company would increase.