PowerTrain 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: 1 Mountain Monster Desert Dragon 2 Sales price $5,400.00 $5,300.00 3 Variable cost of goods sold 3,255.00 3,400.00 4 Manufacturing margin $2,145.00 $1,900.00 5 Variable selling expenses 1,065.00 946.00 6 Contribution margin $1,080.00 $954.00 7 Fixed expenses 485.00 305.00 8 Income from operations $595.00 $649.00 In addition, the following sales unit volume information for the period is as follows: Mountain Monster Desert Dragon Sales unit volume 5,300 5,150 Required: a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. b. What advice would you give to the management of PowerTrain Sports Inc. regarding the relative profitability of the two products? PowerTrain Sports Inc. Contribution Margin by Product 1 Mountain Monster Desert Dragon 2 3 4 5 6 7

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 12E: Galaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the...

See similar textbooks

Related questions

Question

PowerTrain 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:

1		Mountain Monster	Desert Dragon
2	Sales price	$5,400.00	$5,300.00
3	Variable cost of goods sold	3,255.00	3,400.00
4	Manufacturing margin	$2,145.00	$1,900.00
5	Variable selling expenses	1,065.00	946.00
6	Contribution margin	$1,080.00	$954.00
7	Fixed expenses	485.00	305.00
8	Income from operations	$595.00	$649.00

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

	Mountain Monster	Desert Dragon
Sales unit volume	5,300	5,150

Required:

a.	Prepare a contribution margin by product report. Calculate the contribution margin ratio for each. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.
b.	What advice would you give to the management of PowerTrain Sports Inc. regarding the relative profitability of the two products?

PowerTrain Sports Inc.

Contribution Margin by Product

1	Mountain Monster	Desert Dragon
2
3
4
5
6
7

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions