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Mountain Monster Desert Dragon 2 Sales price $5,000.00 $5,275.00 3 Variable cost of goods sold 3,275.00 3,500.00 4 Manufacturing margin $1,725.00 $1,775.00 5 Variable selling expenses 225.00 825.00 6 Contribution margin $1,500.00 $950.00 7 Fixed expenses 485.00 310.00 8 Income from operations $1,015.00 $640.00

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Answer:

The question requires that we prepare a contribution margin report based on  the format provided in the full question which is attached herewith:

Explanation:

                              Contribution Margin Report by Product

                                                                 Mountain Monster     Desert Dragon

Revenue(4900*$5000)(4750*$5275)    $24,500,000          $25,056,250

Variable cost of goods sold

($3275*4900)($3500*4750)                   ($16,047,500)          ($16,625,000)

Manufacturing margin

($1725*4900)($1775*4750)                      $8,452,500           $8,431,250  

Variable selling expenses

(225*4900)(825*4750)                            ($1,102,500)           ($3,918,750)

Contribution margin

(1500*4900)(950*4750)                           $7,350,000              $4,512,500

Contribution margin ratio                            30.00%                          18.01%

(contribution/sales)

$7350,000/$24,500,000*100=30%

   $4,512,500/ $25,056,250=18%

             

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