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:

In addition, the following sales unit volume information for the period is as follows:

a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each.

b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products?

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Hurricane Conquistador $ 6,000 (3,600) Sales price.... Variable cost of goods sold Manufacturing margin .. Variable selling expenses Contribution margin... Fixed expenses.... Operating income ... $11,500 (5,750) $ 5,750 (1,150) $ 4,600 (1,000) $ 3,600 $2,400 (900) $ 1,500 (750) $ 750 Conquistador Hurricane Sales unit volume 10,000 4,000