To recast the contribution margin data by product report, multiply the sales volume by each per unit amount. To calculate the contribution margin 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:

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 product as a whole percent.

Galaxy Sports Inc.

Contribution Margin by Product To recast the contribution margin data by product report, multiply the sales volume by each per unit amount. To calculate the contribution margin

ratio, divide the contribution margin by sales.

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

The

$$ line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix were shifted more

toward the Conquistador $$ line, the overall profitability of the company would increase.

ratio, divide the contribution margin by sales.

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

The

$$ line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix were shifted more

toward the Conquistador $$ line, the overall profitability of the company would increase.