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 Conquistador The shifted more toward the l % Hurricane % b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products? line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix line, the overall profitability of the company would increase.
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 Conquistador The shifted more toward the l % Hurricane % b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products? line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix line, the overall profitability of the company would increase.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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:
Sales price
Variable cost of goods sold
Manufacturing margin
Variable selling expenses
Contribution margin
Conquistador
$5,800
(3,650)
$2,150
(990)
$1,160
(550)
$610
Sales unit volume
Hurricane
$3,600
(2,410)
$1,190
(614)
$576
(230)
$346
Fixed expenses
Operating income
In addition, the following sales unit volume information for the period is as follows:
Conquistador
2,600
Hurricane
1,900.
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
Conquistador Hurricane
Transcribed Image Text: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
Conquistador
%
Hurricane
%
b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products?
The
shifted more toward the
line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix were
line, the overall profitability of the company would increase.
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