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 $5,800 $3,600 (3,650) (2,410) $2,150 $1,190 (614) $576 Sales price Variable cost of goods sold Manufacturing margin Variable selling expenses Contribution margin Fixed expenses Operating income In addition, the following sales unit volume information for the period is as follows: Conquistador 2,600 Hurricane 1,900 Sales unit volume (990) $1,160 (550) $610 Conquistador 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 (230) $346 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 Hurricane $5,800 $3,600 (3,650) (2,410) $2,150 $1,190 (614) $576 Sales price Variable cost of goods sold Manufacturing margin Variable selling expenses Contribution margin Fixed expenses Operating income In addition, the following sales unit volume information for the period is as follows: Conquistador 2,600 Hurricane 1,900 Sales unit volume (990) $1,160 (550) $610 Conquistador 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 (230) $346 Hurricane
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
$5,800
$3,600
(3,650)
(2,410)
$2,150
$1,190
(990)
$1,160
Sales price
Variable cost of goods sold
Manufacturing margin
Variable selling expenses
Contribution margin
Fixed expenses
(230)
$346
Operating income
In addition, the following sales unit volume information for the period is as follows:
Conquistador
2,600
Hurricane
1,900
Sales unit volume.
(550)
$610
(614)
$576
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
Transcribed Image Text:Salegunit volume
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
Conquistador
%
The
shifted more toward the l
Hurricane
8
1,900
%
b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products?
line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix were
line, the overall profitability of the company would increase.
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