Territory and Product Profitability AnalysisPipeline Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and PacificPounder. These surfboards are sold in two regions, East Coast and West Coast. Information about the twosurfboards is as follows:Atlantic WavePacific PounderSales priceVariable cost of goods sold per unitManufacturing margin per unitVariable selling expense per unitContribution margin per unitThe sales unit volume for the sales territories and products for the period is as follows:East Coast West Coast2,960Line Item DescriptionSalesVariable cost of goods soldManufacturing marginVariable selling expensesContribution margin0Pipeline Surfboards Inc.Contribution Margin by TerritoryContribution margin ratio1,4801,480Atlantic Wavea. Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for eachterritory. Round contribution margin ratio answers to two decimal places.$$300(111)$189(129)$60East Coast West Coast%Pacific Pounder%$250(123)$127(57)$70b. What advice would you give to the management of Pipeline Surfboards regarding the relativeprofitability of the two territories?The total contribution margin isratio isfor the East Coast, while the contribution marginfor West Coast. This is because East Coast sells only Atlantic Wave, whichcontribution margin per unit. In attempting to improve the company'shave aprofitability, it isthat changing the mix of products to the two territories will havemuch effect. In addition, the variable selling expenses per unit for thehigh.may be too

preparation of contribution margin report and calculation of contribution margin ratio with…

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: Sales price Variable cost of goods sold per unit Manufacturing margin per unit Atlantic Wave $300 (111) $189 (130) Pacific Pounder $250 (123) $127 (57)

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: Sales price Variable cost of goods sold per unit Manufacturing margin per unit Atlantic Wave $300 (111) $189 (130) Pacific Pounder $250 (123) $127 (57)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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