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	(1,154)		(802)
Contribution margin	$1,216		$588
Fixed expenses	(570)		(240)
Operating income	$646		$348

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

	Conquistador		Hurricane
Sales unit volume	2,000		1,400

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
Variable cost of goods sold
Manufacturing margin
Variable selling expenses
Contribution margin
Contribution margin ratio