Outdoor Sports Vehicles Inc. manufactures and sells two styles of ATVs, 4-wheel drive (4WD) and 2-wheel drive
Question:
Outdoor Sports Vehicles Inc. manufactures and sells two styles of ATVs, 4-wheel drive (4WD) and 2-wheel drive (2WD), 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 unit volume information for the period is as follows:
a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each product as a whole percent, rounded to two decimal places.
b. What advice would you give to the management of Outdoor Sports Vehicles Inc. regarding the relative profitability of the twoproducts?
Step by Step Answer:
Managerial Accounting
ISBN: b010ikdqzm
10th Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac