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 $5,800 $3,800 Variable cost of goods sold (3,650) (2,550) Manufacturing margin $2,150 $1,250 Variable selling expenses (874) (680) Contribution margin $1,276 $570 Fixed expenses (600) (230) Operating income $676 $340 In addition, the following sales unit volume information for the period is as follows: Conquistador Hurricane Sales unit volume 2,200 1,500 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 $Sales Variable cost of goods sold Variable cost of goods sold $Manufacturing margin $Manufacturing margin Variable selling expenses Variable selling expenses $Contribution margin $Contribution margin Contribution margin ratio% Contribution margin ratio%
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 $5,800 $3,800 Variable cost of goods sold (3,650) (2,550) Manufacturing margin $2,150 $1,250 Variable selling expenses (874) (680) Contribution margin $1,276 $570 Fixed expenses (600) (230) Operating income $676 $340 In addition, the following sales unit volume information for the period is as follows: Conquistador Hurricane Sales unit volume 2,200 1,500 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 $Sales Variable cost of goods sold Variable cost of goods sold $Manufacturing margin $Manufacturing margin Variable selling expenses Variable selling expenses $Contribution margin $Contribution margin Contribution margin ratio% Contribution margin ratio%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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 | $5,800 | $3,800 | ||
| Variable cost of goods sold | (3,650) | (2,550) | ||
| Manufacturing margin | $2,150 | $1,250 | ||
| Variable selling expenses | (874) | (680) | ||
| Contribution margin | $1,276 | $570 | ||
| Fixed expenses | (600) | (230) | ||
| Operating income | $676 | $340 |
In addition, the following sales unit volume information for the period is as follows:
| Conquistador | Hurricane | |||
| Sales unit volume | 2,200 | 1,500 |
a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each product as a whole percent.
Contribution Margin by Product
| Conquistador | Hurricane | |
|
|
$Sales | $Sales |
|
|
Variable cost of goods sold | Variable cost of goods sold |
|
|
$Manufacturing margin | $Manufacturing margin |
|
|
Variable selling expenses | Variable selling expenses |
|
|
$Contribution margin | $Contribution margin |
|
|
Contribution margin ratio% | Contribution margin ratio% |
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