Two Images!

Product Profitability Analysis 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

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

C

line, the overall profitability of the company would increase.

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: