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 $5,200 $3,400 Variable cost of goods sold (3,280) (2,280) Manufacturing margin $1,920 $1,120 Variable selling expenses (1,088) (610) Contribution margin $832 $510 Fixed expenses (390) (200) Operating income $442 $310 In addition, the following sales unit volume information for the period is as follows: Conquistador Hurricane Sales unit volume 3,200 2,200 Prepare a contribution margin by product report. Compute the contribution margin ratio for each product as a whole percent.
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 |
$5,200 |
|
$3,400 |
|
|
Variable cost of goods sold |
(3,280) |
|
(2,280) |
|
|
Manufacturing margin |
$1,920 |
|
$1,120 |
|
|
Variable selling expenses |
(1,088) |
|
(610) |
|
|
Contribution margin |
$832 |
|
$510 |
|
|
Fixed expenses |
(390) |
|
(200) |
|
|
Operating income |
$442 |
|
$310 |
|
In addition, the following sales unit volume information for the period is as follows:
|
|
Conquistador |
Hurricane |
||
|
Sales unit volume |
3,200 |
|
2,200 |
|
Prepare a contribution margin by product report. Compute the contribution margin ratio for each product as a whole percent.
Variable costs are those nature of costs which changes along with change in sales activity level. Fixed costs do not change with change in sales activity level. Contribution margin is excess of sales revenue over variable costs in the business.
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