Question

In: Accounting

Mountain Monster Desert Dragon 2 Sales price $5,500.00 $5,300.00 3 Variable cost of goods sold 3,290.00...

	Mountain Monster	Desert Dragon
2	Sales price	$5,500.00	$5,300.00
3	Variable cost of goods sold	3,290.00	3,300.00
4	Manufacturing margin	$2,210.00	$2,000.00
5	Variable selling expenses	1,000.00	1,152.00
6	Contribution margin	$1,210.00	$848.00
7	Fixed expenses	475.00	320.00
8	Income from operations	$735.00	$528.00

In addition, the following sales unit volume information for the period is as follows:

	Mountain Monster	Desert Dragon
Sales unit volume	5,000	4,850

Required:

a.	Prepare a contribution margin by product report. Calculate the contribution margin ratio for each. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.
b.	What advice would you give to the management of PowerTrain Sports Inc. regarding the relative profitability of the two products?

Amount Descriptions

Contribution margin

Contribution margin ratio

Cost of goods sold

Fixed expenses

Gross profit

Manufacturing margin

Revenues

Variable cost of goods sold

Variable selling expenses

a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

PowerTrain Sports Inc.

Contribution Margin by Product

1	Mountain Monster	Desert Dragon
2
3
4
5
6
7

Amount Descriptions
Contribution margin
Contribution margin ratio
Cost of goods sold
Fixed expenses
Gross profit
Manufacturing margin
Revenues
Variable cost of goods sold
Variable selling expenses

X

Contribution Margin Report

a. Prepare a contribution margin by product report. Calculate the contribution margin ratio for each. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

PowerTrain Sports Inc.

Contribution Margin by Product

1	Mountain Monster	Desert Dragon
2
3
4
5
6
7

X

Final Question

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

The Mountain Monster line provides the total contribution margin and the contribution margin ratio. If the sales mix were shifted more toward the line, the overall profitability of the company would increase.

Expert Solution

ekkarill92 answered 2 years ago

Philadelphia Company has the following information for March: Sales $455,000 Variable cost of goods sold 240,000...

Philadelphia Company has the following information for March: Sales $455,000 Variable cost of goods sold 240,000 Fixed manufacturing costs 70,000 Variable selling and administrative expenses 52,000 Fixed selling and administrating expenses 35,000 For credit, show all your work Determine the: (a) manufacturing margin (b) contribution margin (c) income from operations for Philadelphia Company.

Ferguson Company has the following information for March: Sales $600,000 Variable cost of goods sold 276,000...

Ferguson Company has the following information for March: Sales $600,000 Variable cost of goods sold 276,000 Fixed manufacturing costs 90,000 Variable selling and administrative expenses 54,000 Fixed selling and administrative expenses 36,000 Determine the following for Ferguson Company for the month of March: a. Manufacturing margin $ b. Contribution margin $ c. Income from operations $

Exercise 3-3 (Algo) Schedules of Cost of Goods Manufactured and Cost of Goods Sold [LO3-3] Primare...

Exercise 3-3 (Algo) Schedules of Cost of Goods Manufactured and Cost of Goods Sold [LO3-3] Primare Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials $ 32,000 Indirect materials used in production $ 4,930 Direct labor $ 58,300 Manufacturing overhead applied to work in process $ 88,200 Underapplied overhead $ 4,160 Inventories Beginning Ending Raw materials $ 10,100 $ 19,700 Work in process $ 55,100 $ 68,300 Finished goods $ 33,200 $ 42,900 Required:...

The Cost of Sales (or Cost of Goods Sold) is usually considered the most important cost...

The Cost of Sales (or Cost of Goods Sold) is usually considered the most important cost in hospitality businesses. How is it determined? Please select the most appropriate answer. 1. It is calculated by adding up all purchases of inventory during one accounting period. 2. It is the amount of inventory on hand. It is calculated by adding the value of every item of inventory available on hand. 3. It is calculated by adding all purchase amounts to the beginning...

as follows: Sales (160,000 units) $960,000 Cost of goods sold

as follows: Sales (160,000 units) $960,000 Cost of goods sold 640,000 Gross margin 320,000 Operating expenses 260,000 Operating income $60,000 Kramer is developing the 2016 budget. In 2016 the company would like to increase selling prices by 12.5%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. a)...

A small business has sales of $2 million, cost of goods sold of $12 million, net...

A small business has sales of $2 million, cost of goods sold of $12 million, net profit of $34,500,net fixed assets of $200,000, and total asset turnover of 5.25. What is the value of current assets?

Joyner Company’s income statement for Year 2 follows: Sales $ 714,000 Cost of goods sold ...

Joyner Company’s income statement for Year 2 follows: Sales $ 714,000 Cost of goods sold 207,000 Gross margin 507,000 Selling and administrative expenses 217,000 Net operating income 290,000 Nonoperating items: Gain on sale of equipment 7,000 Income before taxes 297,000 Income taxes 89,100 Net income $ 207,900 Its balance sheet amounts at the end of Years 1 and 2 are as follows: Year 2 Year 1 Assets ...

Problem 3-13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3]...

Problem 3-13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3] Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 216,000 Purchases of raw materials $ 269,000 Direct labor ? Administrative expenses $ 158,000 Manufacturing overhead applied to work in process $ 370,000 Actual manufacturing overhead cost $ 356,000 Inventory balances at the beginning and end of the year...

Problem 3-13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3]...

Problem 3-13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3] Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 215,000 Purchases of raw materials $ 264,000 Direct labor ? Administrative expenses $ 151,000 Manufacturing overhead applied to work in process $ 366,000 Actual manufacturing overhead cost $ 355,000 Inventory balances at the beginning and end of the year...

Exercise 3-6 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3]...

Exercise 3-6 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3] The following data from the just completed year are taken from the accounting records of Mason Company: Sales $ 657,000 Direct labor cost $ 85,000 Raw material purchases $ 131,000 Selling expenses $ 100,000 Administrative expenses $ 48,000 Manufacturing overhead applied to work in process $ 204,000 Actual manufacturing overhead costs $ 225,000 Inventories Beginning Ending Raw materials $ 8,400 $ 10,500 Work...

Question

Mountain Monster Desert Dragon 2 Sales price $5,500.00 $5,300.00 3 Variable cost of goods sold 3,290.00...

Solutions

Expert Solution

Related Solutions

Philadelphia Company has the following information for March: Sales $455,000 Variable cost of goods sold 240,000...

Ferguson Company has the following information for March: Sales $600,000 Variable cost of goods sold 276,000...

Exercise 3-3 (Algo) Schedules of Cost of Goods Manufactured and Cost of Goods Sold [LO3-3] Primare...

The Cost of Sales (or Cost of Goods Sold) is usually considered the most important cost...

as follows: Sales (160,000 units) $960,000 Cost of goods sold

A small business has sales of $2 million, cost of goods sold of $12 million, net...

Joyner Company’s income statement for Year 2 follows: Sales $ 714,000 Cost of goods sold ...

Problem 3-13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3]...

Problem 3-13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3]...

Exercise 3-6 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3]...