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 Hurricane $2,600 $4,200 (2,650) (1,740) $1,550 $860 (626) (444) $924 (430) $494 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: Hurricane Conquistador 2,000 Sales unit volume 1,500 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 % $416 (170) $246 ododdá

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 Hurricane $2,600 $4,200 (2,650) (1,740) $1,550 $860 (626) (444) $924 (430) $494 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: Hurricane Conquistador 2,000 Sales unit volume 1,500 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 % $416 (170) $246 ododdá

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: Sales price Variable cost of goods sold Manufacturing margin Variable selling expenses Contribution margin Fixed expenses Operating income Conquistador Hurricane $5,000 $3,200 Sales unit volume (3,150) $1,850 (700) $1,150 (540) $610 2,700 (2,140) $1,060 $ (420) In addition, the following sales unit volume information for the period is as follows: Conquistador Hurricane $640 (260) % $380 1,900 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 $ $ $ % b. What advice would you give to the management of Galaxy…
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 $5,200.00 $5,300.00 3 Variable cost of goods sold 3,240.00 3,450.00 4 Manufacturing margin $1,960.00 $1,850.00 5 Variable selling expenses 712.00 1,108.00 6 Contribution margin $1,248.00 $742.00 7 Fixed expenses 470.00 320.00 8 Income from operations $778.00 $422.00 In addition, the following sales unit volume information for the period is as follows: Mountain Monster Desert Dragon Sales unit volume 4,800 4,650 Required: a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each.…
Transfer pricingMogi Corp. manufactures one primary product, which is processed through two divisions (P and R). Costs for each division are: P R Variable cost per gallon $3 $15 Fixed cost per gallon* 2 12 * Based on production of 25,000 and 40,000 gallons for P and R respectively. P Division produces 25,000 gallons per month. R Division uses 40,000 gallons per month; of that, 25,000 gallons are purchased internally and 15,000 are purchased externally at $10 per gallon. After processing through R Division, a gallon of final product can be sold for $55.a. What would be P’s transfer price to R Division if the price is set at 180 percent of variable cost? Answer: 5.4 b. What would be P’s transfer price to R Division if the price is set at 130 percent of full cost? Answer: 6.5 c. What would be P’s transfer price to R Division if the price is set at market value? Answer: 10 d. What is Mogi Corp.’s operating profit if all 40,000 gallon of final product can be sold for $55…
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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 Hurricane Sales price $4,600 $3,000 Variable cost of goods sold (2,900) (2,010) Manufacturing margin $1,700 $990 Variable selling expenses (734) (510) Contribution margin $966 $480 Fixed expenses (450) (190) Operating income $516 $290 In addition, the following sales unit volume information for the period is as follows: Conquistador Hurricane Sales unit volume 3,400 2,500 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…
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 Hurricane Sales price $5,600 $3,400 Variable cost of goods sold (3,530) (2,280) Manufacturing margin $2,070 $1,120 Variable selling expenses (1,174) (610) Contribution margin $896 $510 Fixed expenses (420) (200) Operating income $476 $310 In addition, the following sales unit volume information for the period is as follows: Conquistador Hurricane Sales unit volume 2,100 1,500 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
The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Total $ 932,000 471,000 461,000 Dirt Bikes $ 265,000 118,000 147,000 69,700 44,000 115,700 186,400 415,800 $ 45,200 Mountain Bikes Sales Variable manufacturing and selling expenses Contribution margin Fixed expenses: Advertising, traceable Depreciation of special equipment. Salaries of product-line managers. Allocated common fixed expenses* Total fixed expenses Net operating income (loss) *Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out. $ 408,000 200,000 208,000 Racing Bikes $ 259,000 153,000 106,000 9,000 40,300 20,400 20,900 8,000 15,100 40,700 38,400 36,600 53,000 81,600 51,800…
Quality Air Conditioning manufactures three home air conditioners: an economy model, a standard model, and a deluxe model. The profits per unit are $63, $95, and $135, respectively. The production requirements per unit are as follows: Number of Number of Fans Manufacturing Time (hours) Cooling Colls Economy A 1 8 Standard 1 2 12 Deluxe 1 4 14 For the coming production period, the company has 260 fan motors, 340 cooling colls, and 2,600 hours of manufacturing time available. How many economy models (6), standard models (S), and deluxe models (D) should the company produce in order to maximize profit? The linear programming model for the problem is as follows: Max 63E+ 955 + 1350 s.t. Fan motors 18+ 15 + LE+ 25 + 85+ 125+ 10 260 40 s 340 140 s 2,600 Cooling coils Manufacturing time The sensitivity report is shown below. Variable Cells Final Value Reduced Cost Objective Coefficient Allowable Increase Allowable Decrease 0.000 63.000 12.000 15.500 180.000 80.000 0.000 95.000 31.000 8.000…
CVP Analysis of Multiple Products Alo Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Alo expects to sell 100,000 regular models and 20,000 deluxe models. A segmented income statement for the two products is as follows: Regular Model Deluxe Model Total Sales $16,000,000 $13,400,000 $29,400,000 Less: Variable costs 9,600,000 8,040,000 17,640,000 Contribution margin $6,400,000 $5,360,000 $11,760,000 Less: Direct fixed costs 1,200,000 960,000 2,160,000 Segment margin $5,200,000 $4,400,000 $9,600,000 Less: Common fixed costs 1,720,800 Operating income $7,879,200 Required: 1. Compute the number of regular models and deluxe models that must be sold to break even. Round your answers to the nearest whole…