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 | $5,200 | $3,400 | ||
| Variable cost of goods sold | (3,280) | (2,280) | ||
| Manufacturing margin | $1,920 | $1,120 | ||
| Variable selling expenses | (724) | (576) | ||
| Contribution margin | $1,196 | $544 | ||
| Fixed expenses | (560) | (220) | ||
| Operating income | $636 | $324 |
In addition, the following sales unit volume information for the period is as follows:
| Conquistador | Hurricane | |||
| Sales unit volume | 1,900 | 1,400 |
Question Content Area
a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each product as a whole percent.
| Conquistador | Hurricane | |
| sales | ||
| variable cost of goods sold | ||
| manufacturing margin | ||
| variable selling expenses | ||
| Contribution margin | ||
| contribution margin ratio % |
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Horngrens Financial And Managerial Accounting
Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura
6th Edition
0134486838, 978-0134486833
