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 volume information for the period is as follows:
Conquistador | Hurricane | |||
Sales unit volume | 3,600 | 2,600 |
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 | |
$ | $ | |
$ | $ | |
$ | $ | |
% | % |
b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products?
The line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix were shifted more toward the line, the overall profitability of the company would increase.
Galaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Conquistador and...
5. 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 $6,400 $4,200 Variable cost of goods sold (4,030) (2,810) Manufacturing margin $2,370 $1,390 Variable selling expenses (1,026) (676) Contribution margin $1,344 $714 Fixed expenses (630) (290) Operating income $714 $424 In addition,...
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...
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...
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...
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...
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...
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...
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...
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...