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Product Profitability Analysis Galaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Conquistador ancl Hunicane, from a single manufacturing facility.
Product Profitability Analysis Galaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Conquistador ancl Hunicane, from a single manufacturing facility. The manufacturing facility operates at 100% of capacity. The following perunit information is available for the two products: Conquistador Hurricane Sales price $5,400 $3,400 Variable cost of goods sold (3,400) (2,280) Manufacturing margin $2,000 $1,120 Variable selling expenses {866) {474) Contribution margin $1,134 $646 Fixed expenses {530) {260) ) Operating income $604 $386 In addition, the following sales unit volume information for the period is as follows: Conquistador Hurricane Sales unit volume 3,200 2,200 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 Sales 17,280,000 7,480,000 Variable cost of goods sold 10,880,000 5,016,000 Manufacturing margin 6,400,000 2,464,000 Variable selling expenses 2,771,200 1,042,800 Contribution margin 64,000 X 2,464 X Contribution margin ratio 37 X % 33 X %
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