EX 20-12 Product profitability analysisObj. 4PowerTrain Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVS), theMountain Monster and Desert Dragon, from a single manufacturing facility. The manufacturingfacility operates at 100% of capacity. The following per-unit information is available for thetwo products:Mountain MonsterDesert DragonSales price ..$5,400$5,250Variable cost of goods sold3,2853,400Manufacturing marginVariable selling expenses$2,115$1,8501,035905Contribution margin.$1,080$ 945Fixed expenses485310Income from operations$ 595$ 635In addition, the following sales unit volume information for the period is as follows:Mountain MonsterDesert DragonSales unit volume5,0004,850A. Prepare a contribution margin by product report. Calculate the contribution margin ratiofor each.В.What advice would you give to the management of PowerTrain Sports Inc. regard-ing the relative profitability of the two products?

Variable costing: Variable costing is the method that is used by the management (managers) for…

Answered: A. Prepare a contribution margin by…

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter20: Variable Costing For Management Analysis

Section: Chapter Questions

Problem 20.4BPR: Salespersons' report and analysis Pachec Inc. employs seven salespersons to sell and distribute its...

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Salespersons' report and analysis Walthman Industries Inc. employs seven salespersons to sell and distribute- its product throughout the state. Data taken from reports received from the .salespersons during the year ended December 31 are as follows: Instructions 1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. (Round whole percent to one digit after decimal point.) 2. Which salesperson generated the highest contribution margin ratio for the year and why? 3. Briefly list factors other than contribution margin that should be considered in evaluating the performance of salespersons.
Salespersons' report and analysis Pachec Inc. employs seven salespersons to sell and distribute its product throughout the slate. Data taken from reports received from the salespersons during the year ended June 30 are as Follows: Instructions 1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. 2. Which salesperson generated the highest contribution margin ratio for the year and why? 3. Briefly list factors other than contribution margin that should be considered in evaluating the performance of salespersons.
Contribution margin analysis sales Select Audio Inc. sells electronic equipment. Management decided curly in the year to reduce the price of the speakers in order to increase sales volume. As a result, for the year ended December 31, the .sales increased by 31,875 from the planned level of 1,048,125. The following information is available from the accounting records for the year ended December 31. A. Prepare an analysis of the sales quantity and unit price factors. B. Did the price decrease generate sufficient volume to result in a net increase in contribution margin if the actual variable cost per unit was 10, as planned?

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A. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each. В. What advice would you give to the management of PowerTrain Sports Inc. regard- ing the relative profitability of the two products?