help please. Thanks EX 20-13 Territory and product profitability analysis t Coas

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help please.
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EX 20-13 Territory and product profitability analysis t Coast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave n, and Pacific Pounder. These surfboards are sold in two regions, East Coast and West Coast. D0 Information about the two surfboards is as follows: Obj. 4 Sales price Variable cost of goods sold per unit....... Manufacturing margin per unit Variable selling expense per unit Contribution margin per unit. Atlantic Wave $200 150 S 50 Pacific Pounder $120 90 s 30 16 S 14 34 S 16 The sales unit volume for the sales territories and products for the period is as follows: West Coast 25,000 25,000 East Coast 40,000 Atlantic Wave Pacific Pounder margin by sales territory report. Calculate the contribution margirn as a whole percent, rounded to two decimal places. ratio for each territory agement of Coast to Coast Surfboards What advice would you give to the man regarding the relative profitability of the two territor

Explanation / Answer

East coast

west coast

sales-atlantic wave

40000*200

8000000

25000*200

5000000

sales-pacific pounder

0

25000*120

3000000

total sales

8000000

8000000

less variable cost

(40000*150)

6000000

(25000*150)+(25000*90)

6000000

manufacturing contribution margin

2000000

2000000

less variable selling expense per unit

(40000*34)

1360000

(25000*34)+(25000*16)

1250000

contribution margin by sales territory

640000

750000

contribution margin ratio by sales territory

contribution.sales

8.00%

9.38%

Sugesstion to the management of coast to coast surfboard is that they should increase the profitability of east coast region they should increase the sale of atlantic wave so that profitability of the region can be increased. Reducing the variable selling expense for the Atlantic Wave by half, for example, would have a significant impact on the firm’s overall profitability

East coast

west coast

sales-atlantic wave

40000*200

8000000

25000*200

5000000

sales-pacific pounder

0

25000*120

3000000

total sales

8000000

8000000

less variable cost

(40000*150)

6000000

(25000*150)+(25000*90)

6000000

manufacturing contribution margin

2000000

2000000

less variable selling expense per unit

(40000*34)

1360000

(25000*34)+(25000*16)

1250000

contribution margin by sales territory

640000

750000

contribution margin ratio by sales territory

contribution.sales

8.00%

9.38%

Sugesstion to the management of coast to coast surfboard is that they should increase the profitability of east coast region they should increase the sale of atlantic wave so that profitability of the region can be increased. Reducing the variable selling expense for the Atlantic Wave by half, for example, would have a significant impact on the firm’s overall profitability

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