y 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 $6,200 $4,000 Variable cost of goods sold (3,910) (2,680) Manufacturing margin $2,290 $1,320 Variable selling expenses (864) (520) Contribution margin $1,426
y 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 $6,200 $4,000 Variable cost of goods sold (3,910) (2,680) Manufacturing margin $2,290 $1,320 Variable selling expenses (864) (520) Contribution margin $1,426
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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 | $6,200 | $4,000 | ||
| Variable cost of goods sold | (3,910) | (2,680) | ||
| Manufacturing margin | $2,290 | $1,320 | ||
| Variable selling expenses | (864) | (520) | ||
| Contribution margin | $1,426 | $800 | ||
| Fixed expenses | (670) | (320) | ||
| Operating income | $756 | $480 |
In addition, the following sales unit volume information for the period is as follows:
| Conquistador | Hurricane | |||
| Sales unit volume | 2,700 | 1,900 |
Question Content Area
a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each product as a whole percent.
| Conquistador | Hurricane | |
|
$Sales
|
$ | $ |
|
Variable cost of goods sold
|
||
|
$Manufacturing margin
|
$ | $ |
|
Variable selling expenses
|
||
|
$Contribution margin
|
$ | $ |
|
Contribution margin ratio%
|
% | % |
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