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: Sales price Conquistador $5,400 Hurricane $3,400 Variable cost of goods sold (3,400) (2,280) Manufacturing margin $2,000 $1,120 Variable selling expenses (812) (576) Contribution margin $1,188 $544 Fixed expenses Operating income (560) $628 (220) 5324 In addition, the following sales unit volume information for the penod is as follows: Sales unit volume Conquistador 2,900 Hurricane 2,100 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 Operating income $628 $324 In addition, the following sales unit volume information for the period is as follows: Sales unit volume Conquistador 2,900 Hurricane 2,100 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 Line Item Description Conquistador Hurricane b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products? The line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mcx were shifted more toward the line, the overall profitability of the company would increase.