Question

Product Probiny Arslysis o r and e ma t uring facility. The naturing facility operates at 100% of Gract. The following permit Galaxy Sportsm anactures and sells two styles of All Terrain Vehicles (ATV), the Cang formation is wat for the two products Conquistador Hurricane $5,000 $11,500 (360) Sales price Variable cost of goods sold Manufacturing margin Variable selling expenses Contribution mangin $2,400 (1150) $1.500 $1.500 Opening income Intion, then w e formation for the persis Conquistador Hurricane Sales un volume 10.000 a. Prepare a co on may product Compute the contribution mari for each produ G yors Inc.

Answer 1

a Galaxy Sports Inc. Contribution margin by product Sales Price Variable cost of goods sold Manufacturing margin Variable selling exp Contribution margin Contribution margin Conquistador 6,000.0 (3,600.0) 2,400.0 (900.0) 1,500.0 25.0% Hurrican 11,500.0 (5,750.0) 5,750.0 (1,150.0) 4,600.0 40.0% % % b what advice would you give to the management of galaxy sports Inc. regarding of the two product? The conquistador line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix were shifted more towards the Hurrican line, overall profitability of the company increase