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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
$4,800
$3,200
Variable cost of goods sold
(3,020)
(2,140)
Manufacturing margin
$1,780
$1,060
Variable selling expenses
(772)
(516)
Contribution margin
$1,008
$544
Fixed expenses
(470)
(220)
Operating income
$538
$324
In addition, the following sales unit volume information for the period is as follows:
Sales unit volume
3,600
2,600
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