in two regions, East Coast and West Coast. Information about the two surfboards is as follows: Atlantic Wave Pacific Pounder Sales price $200 $120 Variable cost of goods sold per unit (150)
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 | $200 | $120 | ||
| Variable cost of goods sold per unit | (150) | (90) | ||
| Manufacturing margin per unit | $50 | $30 | ||
| Variable selling expense per unit | (34) | (16) | ||
| Contribution margin per unit | $16 | $14 |
The sales unit volume for the sales territories and products for the period is as follows:
| East Coast | West Coast | ||||
| Atlantic Wave | 40,000 | 25,000 | |||
| Pacific Pounder | 0 | 25,000 |
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.
Contribution Margin by Territory
| East Coast | West Coast | |
|
|
$- Select - | $- Select - |
|
|
- Select - | - Select - |
|
|
$- Select - | $- Select - |
|
|
- Select - | - Select - |
|
|
$- Select - | $- Select - |
| Contribution margin ratio | fill in the blank bc784308b025070_16% | fill in the blank bc784308b025070_17% |
b. What advice would you give to the management of Coast to Coast Surfboards regarding the relative profitability of the two territories?
The total contribution margin is
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