PowerTrain 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:
|
1 |
Mountain Monster |
Desert Dragon |
|
|
2 |
Sales price |
$5,300.00 |
$5,300.00 |
|
3 |
Variable cost of goods sold |
3,210.00 |
3,350.00 |
|
4 |
Manufacturing margin |
$2,090.00 |
$1,950.00 |
|
5 |
Variable selling expenses |
1,030.00 |
1,102.00 |
|
6 |
Contribution margin |
$1,060.00 |
$848.00 |
|
7 |
Fixed expenses |
470.00 |
305.00 |
|
8 |
Income from operations |
$590.00 |
$543.00 |
In addition, the following sales unit volume information for the period is as follows:
| Mountain Monster | Desert Dragon | |||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales unit volume | 4,800 |
4,650
|
|
PowerTrain Sports Inc. |
||
|
Contribution Margin by Product |
||
|
Mountain Monster |
Desert Dragon |
|
|
4,800 Units |
4,650 Units |
|
|
Revenues |
2,54,40,000 |
2,46,45,000 |
|
Variable cost of goods sold |
1,54,08,000 |
1,55,77,500 |
|
Manufacturing margin |
1,00,32,000 |
90,67,500 |
|
Variable selling expenses |
49,44,000 |
51,24,300 |
|
Contribution margin |
50,88,000 |
39,43,200 |
|
Contribution margin ratio |
20 % |
16 % |
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