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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: Hurricane Conquistador $5,200 Sales price $3,200 (3,280) (2,140) Variable cost of goods sold Manufacturing margin $1,920 $1,060 Variable selling expenses (776) (612) Contribution margin $1,144 5448 Fixed expenses (540) (180) Operating income $604 S268 In addition, the following sales unit volume information for the period is as follows: Conquistador Hurricane Sales unit volume 2,900 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 15,080,000 3,200 X Variable cost of goods sold 9,512,000 5,564,000 X Manufacturing margin 5,568,000 2,756,000 X Variable selling expenses 2,552,000 X 1,591,200 X Contribution margin 3,500,000 X 1,164,800 X Contribution margin ratio 22 % 14 %
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