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Product Profitability Analysis Galaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVS), the Conquistador and Hurricane, from a single manufacturing
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 $6,200 $4,000 Variable cost of goods sold (3,910) (2,680) Manufacturing margin $2,290 $1,320 Variable selling expenses (926) (640) Contribution margin $1,364 $680 Fixed expenses (640) (270) Operating income $724 $410 In addition, the following sales unit volume information for the period is as follows: Sales unit volume Conquistador 2,100 Hurricane 1,500 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 Sales Variable cost of goods sold Manufacturing margin Variable selling expenses Conquistador Hurricane Contribution margin Contribution margin ratio % %
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