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eBook Question Content Area Territory and Product Profitability Analysis Pipeline Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and Pacific Pounder. These
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Question Content Area
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:
Line Item Description Atlantic Wave Pacific Pounder
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 sales territories and products for the period is as follows:
Product East Coast West Coast
Atlantic Wave
Pacific Pounder
Question Content Area
a Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory.
Pipeline Surfboards Inc.
Contribution Margin by Territory
Line Item Description East Coast West Coast
Sales
$Sales
$Sales
Variable cost of goods sold
Variable cost of goods sold
Variable cost of goods sold
Manufacturing margin
$Manufacturing margin
$Manufacturing margin
Variable selling expenses
Variable selling expenses
Variable selling expenses
Contribution margin
$Contribution margin
$Contribution margin
Contribution margin ratio Contribution margin ratio
Contribution margin ratio
Question Content Area
b What advice would you give to the management of Pipeline Surfboards regarding the relative profitability of the two territories?
The total contribution margin is fill in the blank of
for the East Coast, while the contribution margin ratio is fill in the blank of
for West Coast. This is because East Coast sells only Atlantic Wave, which have a fill in the blank of
contribution margin per unit. In attempting to improve the companys profitability, it is fill in the blank of
that changing the mix of products to the two territories will have much effect. In addition, the variable selling expenses per unit for the fill in the blank of
may be too high. 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:
The sales unit volume for the sales territories and products for the period is as follows:
a Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory.
Pipeline Surfboards Inc.
Contribution Margin by Territory The sales unit volume for the sales territories and products for the period is as follows:
a Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory.
Pipeline Surfboards Inc.
Contribution Margin by Territory
b What advice would you give to the management of Pipeline Surfboards regarding the relative profitability of the two territories?
The total contribution margin is for the East Coast, while the contribution margin ratio is
a contribution margin per unit. In attempting to improve the company's profitability, it is
for West Coast. This is because East Coast sells only Atlantic Wave, which have
In addition, the variable selling expenses per unit for the
may be too high.
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