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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 $6,000 (3,600) $2,400 (900) Sales price Variable cost of goods sold Manufacturing margin $11,500 (5,750) $5,750 Variable selling expenses (1,150) Contribution margin $4,600 Fixed expenses (1,000) Operating income $3,600 In addition, the following sales unit volume information for the period is as follows: Conquistador 10,000 Hurricane 4,000 Sales unit volume $1,500 Hurricane (750) $750 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 Line Item Description Conquistador Hurricane

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 $6,000 (3,600) $2,400 (900) Sales price Variable cost of goods sold Manufacturing margin $11,500 (5,750) $5,750 Variable selling expenses (1,150) Contribution margin $4,600 Fixed expenses (1,000) Operating income $3,600 In addition, the following sales unit volume information for the period is as follows: Conquistador 10,000 Hurricane 4,000 Sales unit volume $1,500 Hurricane (750) $750 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 Line Item Description Conquistador Hurricane

FINANCIAL ACCOUNTING
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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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 $6,000 (3,600) $2,400 Sales price Variable cost of goods sold Manufacturing margini Variable selling expenses Contribution margin (900) Sales unit volume $1,500 Fixed expenses Operating income In addition, the following sales unit volume information for the period is as follows: Hurricane 4,000 (750) $750 Hurricane $11,500 (5,750) $5,750 (1,150) $4,600 (1,000) $3,600 Conquistador 10,000 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 Line Item Description Conquistador Hurricane
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: Conquistador $6,000 (3,600) $2,400 Sales price Variable cost of goods sold Manufacturing margini Variable selling expenses Contribution margin (900) Sales unit volume $1,500 Fixed expenses Operating income In addition, the following sales unit volume information for the period is as follows: Hurricane 4,000 (750) $750 Hurricane $11,500 (5,750) $5,750 (1,150) $4,600 (1,000) $3,600 Conquistador 10,000 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 Line Item Description Conquistador Hurricane
Operating income $3,600 In addition, the following sales unit volume information for the period is as follows: Conquistador 10,000 Sales unit volume $750 Hurricane Line Item Description Conquistador 4,000 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 Hurricane b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products? The ne provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix were shifted more toward the line, the overall profitability of the company would increase.
Transcribed Image Text:Operating income $3,600 In addition, the following sales unit volume information for the period is as follows: Conquistador 10,000 Sales unit volume $750 Hurricane Line Item Description Conquistador 4,000 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 Hurricane b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products? The ne provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix were shifted more toward the line, the overall profitability of the company would increase.
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