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Coast to Coast Surfboards Inc. manufactures and sells tire styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboards are sold in two regions, East
Coast to Coast Surfboards Inc. manufactures and sells tire styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboards are sold in two regions, East Coast and West Coast. Information about the tus surfboards is as follows Sales price Variable cost of goods sold per unit Manufacturing margin per un Variable selling expense per unit Contribution margin per unit Atlantic Wave Pacific Pounder $450 $400 (167) (184) $216 (202) (104) $112 The sales unit volume for the territories and products for the period is as followe East Coast West Coast Pacific Pounder 2.400 0 1.740 1.740 Prepare acution margin by sales territory report Compute the corbution margin ratio for each tentary whole percent, rounded to two decimal places, if required Coast to Coast Surfboards Inc. Contribution Margin by Territory 4 Contribution margin ra 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 tem The total contribution margin is for the East Coast, while the contribution margin race is for West Coast. This is because East Coast selle anly Arancic Wave, which have a contribution margin ratio but a contribution margin per unit. In attempting to improve the company's profitability, it is that charging the mix of araducts to the two territories will have much effect. In addition, the variable selling expenses per unit for the may be the high
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