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 $5,400 $3,200

Variable cost of goods sold (3,400) (2,140)

Manufacturing margin $2,000 $1,060

Variable selling expenses (866) (452)

Contribution margin $1,134 $608

Fixed expenses (530) (240)

Operating income $604 $368

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

Conquistador Hurricane

Sales unit volume 2,700 1,900

a. Prepare a contribution margin by product report.

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

Conquistador Hurricane

Sales Sales

Variable cost of goods sold Variable cost of goods sold

Manufacturing margin Manufacturing margin

Variable selling expenses Variable selling expenses

Contribution margin Contribution margin

Contribution margin ratio 21% Contribution margin ratio%. 19%