Question
Product Profitability Analysis PowerTrain Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Mountain Monster and Desert Dragon, from a single
Product Profitability Analysis PowerTrain Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Mountain Monster and Desert Dragon, from a single manufacturing facility. The manufacturing facility operates at 100% of capacity. The following per-unit information is available for the two products: Mountain Monster Desert Dragon Sales price $5,400 $5,250 Variable cost of goods sold 3,285 3,400 Manufacturing margin $2,115 $1,850 Variable selling expenses 1,035 905 Contribution margin $1,080 $945 Fixed expenses 485 310 Income from operations $595 $635 In addition, the following sales unit volume information for the period is as follows: Mountain Monster Desert Dragon Sales unit volume 5,000 4,850 a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each product as a whole percent. PowerTrain Sports Inc. Contribution Margin by Product Mountain Monster Desert Dragon Revenues $ $ Variable cost of goods sold Manufacturing margin $ $ Variable selling expenses Contribution margin $ $ Contribution margin ratio % %
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