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Territory and Product Profitability Analysis

Pipeline 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:

Line Item Description Atlantic Wave Pacific Pounder

Sales price $$250$ $$200$

Variable cost of goods sold per unit $(93)(92)$

Manufacturing margin per unit $$157$ $$108$

Variable selling expense per unit $(112)(52)$

Contribution margin per unit $$45$ $$56$

The sales unit volume for the sales territories and products for the period is as follows:

Product East Coast West Coast

Atlantic Wave $2,8601,430$

Pacific Pounder $01,430$

Question Content Area

a$.$ Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory. Round contribution margin ratio answers to two decimal places.

Pipeline Surfboards Inc.

Contribution Margin by Territory

Line Item Description East Coast West Coast

Sales

$Sales

$715,000$

$Sales

Variable cost of goods sold

Variable cost of goods sold

Variable cost of goods sold

Manufacturing margin

$Manufacturing margin

$Manufacturing margin

Variable selling expenses

Variable selling expenses

Variable selling expenses

Contribution margin

$Contribution margin

$Contribution margin

Contribution margin ratio

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