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	$5,000		$3,200
Variable cost of goods sold	(3,150)		(2,140)
Manufacturing margin	$1,850		$1,060
Variable selling expenses	(900)		(612)
Contribution margin	$950		$448
Fixed expenses	(450)		(180)
Operating income	$500		$268

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

	Conquistador	Hurricane
Sales unit volume	3,000		2,200

Question Content Area

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 5,000 X 3,200 X Variable cost of goods sold Manufacturing margin Variable selling expenses Contribution margin Contribution margin ratio