Accounting Product Profitability AnalysisGalaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVS), theConquistador and Hurricane, from a single manufacturing facility. The manufacturingfacility operates at 100% of capacity. The following per-unit information is available forthe two products:Variable cost of goods soldManufacturing marginvariable selling expensesContribution marginConquistador$6,400(4,030)$2,370Sales un volume(962)$1,400Fixed expensesOperating incomeIn addition, the following sales unit volume information for the period is as follows:(660)1748Hurricane$4,000(2,680)$1,320(640)$500Conquistador1,500(270)$410Hurricane2.500a. Prepare a contribution margin by product report. Compute the contribution marginratio for each product as a whole percent.Galaxy Sports Inc.Contribution Margin by ProductConquistador Hurricaneb. What advice would you give to the management of Galaxy Sports Inc, regarding theprofitability of the two products?Theline provides the largest total contribution margin and the largestcontribution margin ratio. If the sales mix were shifted more toward theline, the overall profitability of the company would increase.

Lets understand the basics.Contribution margin is the excess of sales over variable cost. It is…

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: Variable cost of goods sold Manufacturing margin Variable selling expenses Contribution margin Conquistador Hurricane $4,000 (2,680) $1.320 (4,030) $2,370 (962) $1,400 (660) Operating income 6748 In addition, the following sales unit volume information for the period is as follows: Conquistador 1,500 (640) $500 (270) $410 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

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: Variable cost of goods sold Manufacturing margin Variable selling expenses Contribution margin Conquistador Hurricane $4,000 (2,680) $1.320 (4,030) $2,370 (962) $1,400 (660) Operating income 6748 In addition, the following sales unit volume information for the period is as follows: Conquistador 1,500 (640) $500 (270) $410 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

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter21: Variable Costing For Management analysis

Section: Chapter Questions

Problem 12E: Galaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the...

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