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:

ConquistadorHurricaneSales price$5,400 $3,200 Variable cost of goods sold(3,400) (2,140) Manufacturing margin$2,000 $1,060 Variable selling expenses(866) (452) Contribution margin$1,134 $608 Fixed expenses(530) (240) Operating income$604 $368

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

ConquistadorHurricaneSales unit volume2,700 1,900

Question Content Area

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

ConquistadorHurricaneContribution marginCost of goods soldDirect laborGross profitSales$- Select -$- Select -Fixed cost of goods soldFixed selling expensesManufacturing marginSalesVariable cost of goods sold- Select -- Select -Contribution marginCost of goods soldFixed manufacturing costsGross profitManufacturing margin$- Select -$- Select -Fixed cost of goods soldFixed selling expensesManufacturing marginSalesVariable selling expenses- Select -- Select -Contribution marginCost of goods manufacturedFixed manufacturing costsFixed salesManufacturing margin$- Select -$- Select -Contribution margin ratioFixed manufacturing costsFixed salesManufacturing marginVariable cost of goods sold- Select -%- Select -%

Question Content Area