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 $3,200 Variable cost of goods sold (3,280) (2,140) Manufacturing margin $1,920 $1,060 Variable selling expenses (724) (420) Contribution margin $1,196 $640 Fixed expenses (560) (260) Operating income $636 $380 In addition, the following sales unit volume information for the period is as follows: Conquistador Hurricane Sales unit volume 3,600 2,600 a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each product as a whole percent.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Conquistador
Hurricane
%
b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products?
The
line 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:Conquistador Hurricane % b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products? The line 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.
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
$3,200
Variable cost of goods sold
(3,280)
(2,140)
Manufacturing margin
$1,920
$1,060
Variable selling expenses
(724)
(420)
Contribution margin
$1,196
$640
Fixed expenses
(560)
(260)
Operating income
$636
$380
|In addition, the following sales unit volume information for the period is as follows:
Conquistador
Hurricane
Sales unit volume
3,600
2,600
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
Transcribed Image Text: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 $3,200 Variable cost of goods sold (3,280) (2,140) Manufacturing margin $1,920 $1,060 Variable selling expenses (724) (420) Contribution margin $1,196 $640 Fixed expenses (560) (260) Operating income $636 $380 |In addition, the following sales unit volume information for the period is as follows: Conquistador Hurricane Sales unit volume 3,600 2,600 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
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