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Mountain Monster Desert Dragon Sales unit volume 5,000 4,850 Mountain Monster Desert Dragon Sales price.... $ 5,400 $5,250 Variable cost of goods sold... 3,285 3,400 Manufacturing margin.. . $2,115 $1,850 Variable selling expenses. . 1,035 905 Contribution margin.. . $1,080 $ 945 Fixed expenses... 485 310 .................... Income from operations.. . |$ 595 $ 635

Mountain Monster Desert Dragon Sales unit volume 5,000 4,850 Mountain Monster Desert Dragon Sales price.... $ 5,400 $5,250 Variable cost of goods sold... 3,285 3,400 Manufacturing margin.. . $2,115 $1,850 Variable selling expenses. . 1,035 905 Contribution margin.. . $1,080 $ 945 Fixed expenses... 485 310 .................... Income from operations.. . |$ 595 $ 635

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
Power Train Sports Inc. manufactures and sells two .styles of All Terrain Vehicles
(ATVs), the Mountain Monster and Desert Dragon, from a single manufacturing facility.
The manufacturing facility operates at 100% of capacity. The following per-unit
information is available for the two products:

In addition, the following sales unit volume information for the period is as follows:

A. Prepare a contribution margin by product report. Calculate the contribution
margin ratio for each.
B. What advice would you give to the management of Power Train Sports Inc.
regarding the relative profitability of the two products?

Mountain Monster Desert Dragon Sales unit volume 5,000 4,850
Transcribed Image Text:Mountain Monster Desert Dragon Sales unit volume 5,000 4,850
Mountain Monster Desert Dragon Sales price.... $ 5,400 $5,250 Variable cost of goods sold... 3,285 3,400 Manufacturing margin.. . $2,115 $1,850 Variable selling expenses. . 1,035 905 Contribution margin.. . $1,080 $ 945 Fixed expenses... 485 310 .................... Income from operations.. . |$ 595 $ 635
Transcribed Image Text:Mountain Monster Desert Dragon Sales price.... $ 5,400 $5,250 Variable cost of goods sold... 3,285 3,400 Manufacturing margin.. . $2,115 $1,850 Variable selling expenses. . 1,035 905 Contribution margin.. . $1,080 $ 945 Fixed expenses... 485 310 .................... Income from operations.. . |$ 595 $ 635
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