Product Profitability AnalysisGalaxy 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: ConquistadorHurricaneSales price$4,400 $2,800 Variable cost of goods sold(2,770) (1,880) Manufacturing margin$1,630 $920 Variable selling expenses(706) (444) Contribution margin$924 $476 Fixed expenses(430) (190) Operating income$494 $286 In addition, the following sales unit volume information for the period is as follows: ConquistadorHurricaneSales unit volume3,600 2,700 a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each product as a whole percent.Galaxy Sports Inc.Contribution Margin by ProductConquistadorHurricaneSalesVariable cost of goods sold vManufacturing margin2$Variable selling expensesContribution marginContribution margin ratio V%%

Contribution margin ratio = Contribution margin / Sales

Answered: Galaxy Sports Inc. manufactures and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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:

	Conquistador	Hurricane
Sales price	$4,400		$2,800
Variable cost of goods sold	(2,770)		(1,880)
Manufacturing margin	$1,630		$920
Variable selling expenses	(706)		(444)
Contribution margin	$924		$476
Fixed expenses	(430)		(190)
Operating income	$494		$286

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

	Conquistador	Hurricane
Sales unit volume	3,600		2,700

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
Sales
Variable cost of goods sold v
Manufacturing margin
2$
Variable selling expenses
Contribution margin
Contribution margin ratio V
%
%

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