Business, 17.12.2019 20:31 chanel2371
Product profitability analysispowertrain sports inc. manufactures and sells two styles of all terrain vehicles (atvs), the mountain monster and desert dragon, from a single manufacturing facility. the manufacturing facility operates at 100% of capacity. the following per-unit information is available for the two products: mountain monster desert dragonsales price $5,000 $3,200 variable cost of goods sold 3,150 2,140 manufacturing margin $1,850 $1,060 variable selling expenses 900 452 contribution margin $950 $608 fixed expenses 450 240 income from operations $500 $368 in addition, the following sales unit volume information for the period is as follows: mountain monster desert dragonsales unit volume 3,300 2,400 a. prepare a contribution margin by product report. calculate the contribution margin ratio for each product as a whole percent. powertrain sports inc. contribution margin by productmountain monster desert dragon$ $$ $$ $% %b. what advice would you give to the management of powertrain sports inc. regarding the relative profitability of the two products? the (mountain monster/desert dragon) line provides the largest total contribution margin and the largest contribution margin ratio. if the sales mix were shifted more toward the (mountain monster/desert dragon) line, the overall profitability of the company would increase.
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