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	$6,400		$4,200
Variable cost of goods sold	(4,030)		(2,810)
Manufacturing margin	$2,370		$1,390
Variable selling expenses	(1,218)		(802)
Contribution margin	$1,152		$588
Fixed expenses	(540)		(240)
Operating income	$612		$348

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

	Conquistador	Hurricane
Sales unit volume	2,700		2,000

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 Soles