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 $$6,000$ $$11,500$

Variable cost of goods sold $(3,600)(5,750)$

Manufacturing margin $$2,400$ $$5,750$

Variable selling expenses $(900)(1,150)$

Contribution margin $$1,500$ $$4,600$

Fixed expenses $(750)(1,000)$

Operating income $$750$ $$3,600$

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

Conquistador Hurricane

Sales unit volume $10,0004,000$

Question Content Area

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

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Conquistador Hurricane

Sales

$Sales

$Sales

Variable cost of goods sold

Variable cost of goods sold

Variable cost of goods sold

Manufacturing margin

$Manufacturing margin

$Manufacturing margin

Variable selling expenses

Variable selling expenses

Variable selling expenses

Contribution margin

$Contribution margin

$Contribution margin

Contribution margin ratio

Contribution margin ratio

$\%$ Contribution margin ratio

$\%$