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. 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? |
a) Calculation of contribution margin | ||||||
Particulars | Mountain monster | Desert dragon | ||||
Sale 5200*4800 , 5300*4650 (a) | $ 2,49,60,000.00 | $ 2,46,45,000.00 | ||||
variable cost of goods sold | $ 1,55,52,000.00 | $ 1,60,42,500.00 | ||||
Manufacturing margin | $ 94,08,000.00 | $ 86,02,500.00 | ||||
variable selling exp | $ 34,17,600.00 | $ 51,52,200.00 | ||||
Contribution margin (b) | $ 59,90,400.00 | $ 34,50,300.00 | ||||
Contribution margin ratio (b)/(a) | 24% | 14% | ||||
b) mountain monster contribution margin in higher than desert dragon | ||||||
in mountain monster profitability of the company will increase |
PowerTrain Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Mountain Monster...
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: Amount Descriptions Contribution margin Contribution margin ratio Cost of goods sold Fixed expenses Gross profit Manufacturing margin Revenues Variable cost of goods sold Variable selling expenses 1 Mountain Monster Desert Dragon 2 Sales price $5,200.00 $5,300.00 3 Variable...
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...
Yower Train 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 ivailable for the two products: Mountain Monster Desert Dragon Sales price $5,200.00 $5,300.00 Variable cost of goods sold 3,240.00 3,450.00 Manufacturing margin $1,850.00 $1,960.00 712.00 Variable selling expenses 1.108.00 Contribution margin $1,248.00 $742.00 Fixed expenses 470.00 320.00 Income from operations $778.00 $422.00...
Instructions Power Train 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: 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 Instructions Mountain Desert Dragon Monster 2 Sales price...
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 $5,000.00 $5,275.00 3 Variable cost of goods sold 3,275.00 3,500.00 4 Manufacturing margin $1,725.00 $1,775.00 5 Variable selling expenses 225.00 825.00 6 Contribution margin $1,500.00 $950.00 7 Fixed expenses 485.00...
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: In addition, the following sales unit volume information for the period is as follows: Mountain Monster Desert Dragon Sales unit volume 4,900 4,750 Mountain Desert Dragon Monster 2 Sales price $5,000.00 3,275.00 $1,725.00 225.00 $1,500.00 485.00 $1,015.00 $5,275.00...
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 $5,225.00 3 Variable cost of goods sold 3,290.00 3,500.00 4 Manufacturing margin $2,110.00 $1,725.00 5 Variable selling expenses 1,030.00 889.00 6 Contribution margin $1,080.00 $836.00 7 Fixed expenses 475.00...
Power Train 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: Mountain Desert Dragon Monster Sales price $5,000.00 $5,275.00 Variable cost of goods sold 3,500.00 3,275.00 $1,725.00 Manufacturing margin $1,775.00 225.00 825.00 Variable selling expenses Contribution margin $1,500.00 $950.00 Fixed expenses 485.00 310.00 Income from operations $1,015.00 $640.00...
Power Train Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATV), 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: Mountain Monster Desert Dragon Sales price $5,325.00 Variable cost of goods sold Manufacturing margin $5,400.00 3,275.00 $2,125.00 937.00 $1,188.00 475.00 $713.00 3,200.00 $2,125.00 1,273.00 $852.00 Variable selling expenses Contribution margin Fixed expenses 310.00 Income from operations $542.00...
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 $5,000 $3,400 Variable cost of goods sold (3,150) (2,280) Manufacturing margin $1,850 $1,120 Variable selling expenses (750) (576) Contribution margin $1,100 $544 Fixed expenses (520) (220) Operating income $580 $324 In addition, the following sales unit...