Chapter 20, Problem 20.3TIF

Communication

Bon Jager Inc. manufactures and sells medical devices used in cardiovascular surgery. The sales team consists of two salespeople, Dean and Martin, A contribution margin report by salesperson was prepared as follows:

Bon Jager Inc.
Contribution Margin by Salesperson
	Dean	Martin
Sales	$400,000	$480,000
Variable cost of goods sold	184,000	264,000
Manufacturing margin	$216,000	$216,000
Variable selling expenses:
Variable promotion expenses	$ 72,000	$ 43,200
Variable sales commission expenses	56,000	67,200
Total variable selling expenses	$128,000	$110,400
Contribution margin	$ 88,000	$105,600
Manufacturing margin as a percent of sales
(manufacturing margin ratio)	54%	4S%
Contribution margin ratio	22%	22%

Write a brief memo to Anna Berenson, the Vice President of Marketing, evaluating the performance of the company's salespeople and providing recommendations on how the salespeople could improve profitability.