Sales territory and salesperson profitability analysis obj. 4 Reyes Industries Inc. manufactures and sells a variety of commercial vehicles in the North east and South west 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:

Northeast Southwest Cassy G. Todd Tim Jeff Average per unit:

Sales price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $96,000 $84,000 $108,000 $78,000 Variable cost of goods sold . . . . . . . . . . . . . . . . 57,600 33,600 64,800 31,200 Commission rate . . . . . . . . . . . . . . . . . . . . . . . . . . . 12% 16% 16% 12%

Units sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 24 24 38 Manufacturing margin ratio . . . . . . . . . . . . . . . . . 40% 60% 40% 60%

a. 1. Prepare a contribution margin by salesperson report. Calculate the contribution margin ratio for each salesperson.
2. Interpret the report.

b. 1. Prepare a contribution margin by territory report. Calculate the contribution margin for each territory as a percent, rounded to one decimal place.
2. Interpret the report.