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	$6,000		$3,600
Variable cost of goods sold	(3,780)		(2,410)
Manufacturing margin	$2,220		$1,190
Variable selling expenses	(840)		(542)
Contribution margin	$1,380		$648
Fixed expenses	(650)		(260)
Operating income	$730		$388

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

	Conquistador	Hurricane
Sales unit volume	2,900		2,100

a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each product as a whole percent.

	Conquistador	Hurricane
Sales	$Sales	$Sales
Variable cost of goods sold	Variable cost of goods sold	Variable cost of goods sold
Manufacturing margin	$Manufacturing margin	$Manufacturing margin
Variable selling expenses	Variable selling expenses	Variable selling expenses
Contribution margin	$Contribution margin	$Contribution margin
Contribution margin ratio	Contribution margin ratio%	Contribution margin ratio%