Question

eBook Calculator Territory and Product Profitability Analysis Coast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboards are sold in two regions, East Coast and West Coast. Information about the two surfboards is as follows: Atlantic Wave Pacific Pounder Sales price $400 $350 Variable cost of goods sold per unit (148) (161) Manufacturing margin per unit $252 $189 Variable selling expense per unit (172) (91) Contribution margin per unit $80 $98 The sales unit volume for the territories and products for the period is as follows: East Coast West Coast Atlantic Wave 3,500 1,750 Pacific Pounder 0 1.750 a. Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory as a whole percent, rounded to two decimal places, if required. Coast to Coast Surfboards Inc. Contribution Margin by Territory East Coast West Coast Sales Variable cost of goods sold Check My Work more Check My Work uses remaining Previous Next >

Answer 1

Contribution Margin

	East Coast	West Coast
Sales	400*3500 = 1400000	(1750*400+1750*350) = 1312500
Variable cost of goods sold	148*3500 = 518000	(1750*148+1750*161) = 540750
Manufacturing margin	882000	771750
Variable selling expenses	172*3500 = 602000	1750*172+1750*91 = 460250
Contribution margin	280000	311500
Contribution margin ratio	280000/1400000 = 20%	311500/1312500 = 23.73%