Sales Territory and Salesperson Profitability Analysis Havasu Off-Road Inc. manufactures and sells a variety of commercial vehicles in the Northeast and Southwest regions. There are two salespersons assigned to each territory. Higher commission rates go to the most experienced salespersons. The following sales statistics are available for each salesperson: Average per unit: Sales price. Variable cost of goods sold Commission rate Units sold Manufacturing margin ratio Line Item Description Rene Contribution margin ratio a. 2. Interpret the report. Paul earns the s Northeast Northeast Southwest Southwest Rene Steve Colleen Paul $ $15,500 $9,300 8% 36 40% % a. 1. Prepare a contribution margin by salesperson report. Compute the contribution margin ratio for each salesperson. Havasu Off-Road Inc. Contribution Margin by Salesperson S S $16,000 $8,000 Steve 12% % 24 50% Colleen $14,000 $8,400 10% $ 40 40% % s $ $18,000 $9,000 8% 60 50% Paul % contribution margin ratio. This is because he sells the average manufacturing margin but at a contribution margin and has the manufacturing margin. Steve also sells products with a salespersons. Although Rene has a high variable cost of goods sold and also sells products with at units, has a commission rate. Colleen has the average sales price per unit, she has the second commission rate, and sells a product mix with a contribution margin ratio among the four total contribution margin.
Sales Territory and Salesperson Profitability Analysis Havasu Off-Road Inc. manufactures and sells a variety of commercial vehicles in the Northeast and Southwest regions. There are two salespersons assigned to each territory. Higher commission rates go to the most experienced salespersons. The following sales statistics are available for each salesperson: Average per unit: Sales price. Variable cost of goods sold Commission rate Units sold Manufacturing margin ratio Line Item Description Rene Contribution margin ratio a. 2. Interpret the report. Paul earns the s Northeast Northeast Southwest Southwest Rene Steve Colleen Paul $ $15,500 $9,300 8% 36 40% % a. 1. Prepare a contribution margin by salesperson report. Compute the contribution margin ratio for each salesperson. Havasu Off-Road Inc. Contribution Margin by Salesperson S S $16,000 $8,000 Steve 12% % 24 50% Colleen $14,000 $8,400 10% $ 40 40% % s $ $18,000 $9,000 8% 60 50% Paul % contribution margin ratio. This is because he sells the average manufacturing margin but at a contribution margin and has the manufacturing margin. Steve also sells products with a salespersons. Although Rene has a high variable cost of goods sold and also sells products with at units, has a commission rate. Colleen has the average sales price per unit, she has the second commission rate, and sells a product mix with a contribution margin ratio among the four total contribution margin.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sales Territory and Salesperson Profitability Analysis
Havasu Off-Road Inc. manufactures and sells a variety of commercial vehicles in the Northeast and Southwest regions. There are two salespersons assigned to each territory. Higher commission rates go to the most experienced salespersons. The following sales
statistics are available for each salesperson:
Average per unit:
Sales price.
Variable cost of goods sold.
Commission rate
Units sold
Manufacturing margin ratio
Northeast Northeast Southwest Southwest
Rene
Steve
Colleen
Paul
Line Item Description Rene
Contribution margin ratio
a. 2. Interpret the report.
Paul earns the
$15,500 $16,000
$9,300
$8,000
12%
8%
%
36
40%
Steve
24
50%
a. 1. Prepare a contribution margin by salesperson report. Compute the contribution margin ratio for each salesperson.
Havasu Off-Road Inc.
Contribution Margin by Salesperson
%
$14,000
$8,400
10%
Colleen
40
40%
%
$18,000
$9,000
Paul
8%
%
60
50%
contribution margin and has the
manufacturing margin. Steve also sells products with a
salespersons. Although Rene has a high variable cost of goods sold and also sells products with a
contribution margin ratio. This is because he sells the
average manufacturing margin but at al
units, has a
commission rate. Colleen has the (
average sales price per unit, she has the second
commission rate, and sells a product mix with a
total contribution margin.
contribution margin ratio among the four
Transcribed Image Text:b. 1. Prepare a contribution margin by territory report. Compute the contribution margin for each territory as a percent, rounded to one decimal place.
Havasu Off-Road Inc.
Contribution Margin by Territory
Line Item Description Northeast
Contribution margin ratio
b. 2. Interpret the report.
The Southwest Region has $
performance of
Southwest
s
more sales and s
more contribution margin. In the Southwest Region, the salesperson with the highest sales unit volume, has the
performance, even though it also has the salesperson with the
contribution margin ratio. The Northeast Region contribution margin is
contribution margin ratio. The Southwest Region has the
than the Southwest Region because of the outstanding
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