EX 20-12 Product profitability analysisObj. 4PowerTrain Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVS), theMountain Monster and Desert Dragon, from a single manufacturing facility. The manufacturingfacility operates at 100% of capacity. The following per-unit information is available for thetwo products:Mountain MonsterDesert DragonSales price ..$5,400$5,250Variable cost of goods sold3,2853,400Manufacturing marginVariable selling expenses$2,115$1,8501,035905Contribution margin.$1,080$ 945Fixed expenses485310Income from operations$ 595$ 635In addition, the following sales unit volume information for the period is as follows:Mountain MonsterDesert DragonSales unit volume5,0004,850A. Prepare a contribution margin by product report. Calculate the contribution margin ratiofor each.В.What advice would you give to the management of PowerTrain Sports Inc. regard-ing the relative profitability of the two products?

Variable costing: Variable costing is the method that is used by the management (managers) for…

A. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each. В. What advice would you give to the management of PowerTrain Sports Inc. regard- ing the relative profitability of the two products?

A. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each. В. What advice would you give to the management of PowerTrain Sports Inc. regard- ing the relative profitability of the two products?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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