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 Sales price Variable cost of goods sold per unit Manufacturing margin per unit Variable selling expense per unit Contribution margin per unit The sales unit volume for the territories and products for the period is as follows: East Coast West Coast 3,100 0 Atlantic Wave Pacific Pounder 1,550 1,550 $300 (111) $189 Coast to Coast Surfboards Inc. Contribution Margin by Territory Pacific Pounder $250 (115) $135 (135) $54 (80) $55 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.

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Chapter7: Variable Costing For Management analysis
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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
Contribution margin ratio
East Coast West Coast
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
for the East Coast, while the contribution margin ratio is
contribution margin ratio but a
for West Coast. This is because East Coast sells only Atlantic Wave, which have a
contribution margin per unit. In attempting to improve the company's profitability, it is i
that changing the mix of products to the two territories will have much effect. In addition, the variable selling expenses per unit for the
may be too high.
Transcribed Image Text: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 Contribution margin ratio East Coast West Coast 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 for the East Coast, while the contribution margin ratio is contribution margin ratio but a for West Coast. This is because East Coast sells only Atlantic Wave, which have a contribution margin per unit. In attempting to improve the company's profitability, it is i that changing the mix of products to the two territories will have much effect. In addition, the variable selling expenses per unit for the may be too high.
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
$300
(111)
$189
(135)
$54
Sales price
Variable cost of goods sold per unit
Manufacturing margin per unit
Variable selling expense per unit
Contribution margin per unit
Atlantic Wave
Pacific Pounder
The sales unit volume for the territories and products for the period is as follows:
East Coast West Coast
3,100
0
1,550
1,550
Pacific Pounder
$250
(115)
$135
(80)
$55
Coast to Coast Surfboards Inc.
Contribution Margin by Territory
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.
Transcribed Image Text: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 $300 (111) $189 (135) $54 Sales price Variable cost of goods sold per unit Manufacturing margin per unit Variable selling expense per unit Contribution margin per unit Atlantic Wave Pacific Pounder The sales unit volume for the territories and products for the period is as follows: East Coast West Coast 3,100 0 1,550 1,550 Pacific Pounder $250 (115) $135 (80) $55 Coast to Coast Surfboards Inc. Contribution Margin by Territory 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.
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