Product Profitability Analysis

The Company 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	$5,000		$3,200
Variable cost of goods sold	(3,150)		(2,140)
Manufacturing margin	$1,850		$1,060
Variable selling expenses	(700)		(420)
Contribution margin	$1,150		$640
Fixed expenses	(540)		(260)
Operating income	$610		$380

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

	Conquistador	Hurricane
Sales unit volume	3,200		2,200

Question Content Area

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

	Conquistador	Hurricane
Contribution 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 -%