Question
Product Profitability Analysis Galaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Conquistador and Hurricane, from a single manufacturing facility.
Product Profitability Analysis
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 | $5,600 | $3,600 | ||
Variable cost of goods sold | (3,530) | (2,410) | ||
Manufacturing margin | $2,070 | $1,190 | ||
Variable selling expenses | (782) | (470) | ||
Contribution margin | $1,288 | $720 | ||
Fixed expenses | (610) | (290) | ||
Operating income | $678 | $430 |
In addition, the following sales unit volume information for the period is as follows:
Conquistador | Hurricane | |||
Sales unit volume | 2,200 | 1,600 |
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?
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