Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

image text in transcribedimage text in transcribed

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 $5,200 $3,200 Sales price Variable cost of goods sold Manufacturing margin (3,280) (2,140) $1,920 $1,060 (724) (356) Variable selling expenses Contribution margin $1,196 $704 Fixed expenses (560) (280) Operating income $636 $424 In addition, the following sales unit volume information for the period is as follows: Conquistador Hurricane Sales unit volume 3,000 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 $ % % b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products? The line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix were shifted more toward the increase. line, the overall profitability of the company would

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting And Finance An Introduction

Authors: Eddie McLaney, Peter Atrill

10th Edition

1292312262, 978-1292312262

More Books

Students also viewed these Accounting questions