a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. **Instructions**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% capacity. The following per-unit information is available for the two products:| | Mountain Monster | Desert Dragon ||---------------------------|------------------|---------------|| Sales price | $5,300.00 | $5,300.00 || Variable cost of goods sold | $3,210.00 | $3,350.00 || Manufacturing margin | $2,090.00 | $1,950.00 || Variable selling expenses | $1,030.00 | $1,102.00 || Contribution margin | $1,060.00 | $848.00 || Fixed expenses | $470.00 | $305.00 || Income from operations | $590.00 | $543.00 | This table compares the financial metrics per unit for two ATV models, the Mountain Monster and Desert Dragon, detailing aspects from sales price, costs, margins, to income from operations. ### Financial Analysis Instructions#### Table of Financial Data1. **Manufacturing Margin** - Mountain Monster: $2,090.00 - Desert Dragon: $1,950.002. **Variable Selling Expenses** - Mountain Monster: $1,030.00 - Desert Dragon: $1,102.003. **Contribution Margin** - Mountain Monster: $1,060.00 - Desert Dragon: $848.004. **Fixed Expenses** - Mountain Monster: $470.00 - Desert Dragon: $305.005. **Income from Operations** - Mountain Monster: $590.00 - Desert Dragon: $543.00#### Sales Unit Volume Information- **Mountain Monster** - Sales Unit Volume: 4,800- **Desert Dragon** - Sales Unit Volume: 4,650#### Required Analysisa. **Prepare a Contribution Margin by Product Report:** - Calculate the contribution margin ratio for each product. Use the exact wording from the Amount Descriptions list for text entries.b. **Management Advice for PowerTrain Sports Inc.:** - Provide insights regarding the relative profitability of the two products.This guide is designed to aid in understanding and analyzing the profitability and financial metrics of the Mountain Monster and Desert Dragon products.

a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

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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