PowerTrain Sports Inc. manufactures and sells two styles of All Terrain Vehicles
ID: 2433033 • Letter: P
Question
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:
4,650
PowerTrain Sports Inc.
Contribution Margin by Product
1
Mountain Monster
Desert Dragon
Revenues
Variable cost of goods sold
?
?
Manufacturing margin
Variable selling expenses
Contribution margin
Contribution margin ratio
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
Explanation / Answer
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 %
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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