Solution-Prepare a contribution margin by product report

Prepare a contribution margin by product report

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Reference no: EM133127467

Question - 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	$6,400	$4,200
Variable cost of goods sold	(4,030)	(2,810)
Manufacturing margin	$2,370	$1,390
Variable selling expenses	(1,154)	(718)
Contribution margin	$1,216	$672
Fixed expenses	(570)	(270)
Operating income	$646	$402

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

	Conquistador	Hurricane
Sales unit volume	2,800	2,000

Required -

a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each product as a whole percent.

b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products?

Reference no: EM133127467

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Prepare a contribution margin by product report

Reference no: EM133127467

Reference no: EM133127467

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