Folk Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow:

TABLES | CHAIRS

Sales Price: $1500 | $100

Variable Manufacturing Cost = $1200 | $40

Sales Commission = $150 | $10

Folk Furniture has three sales representatives: Generation Furniture has three sales representatives: Avery, Brian, and Crissy. Avery sold 90 tables with 4 chairs each. Brian sold 80 tables with 6 chairs each. Crissy sold 70 tables with 8 chairs each.

Requirement 1. Calculate the total contribution margin and the contribution margin ratio for each sales representative (round to two decimal places).

Before calculating the total contribution margin, begin by identifying and calculating the total number of tables and chairs sold by each sales representative for the period.

Sales representative:	Tables sold	Chairs per table	Total chairs sold
Archie
Ben
Cait

Calculate the total contribution margin for each sales representative.

Sales representative:	Archie	Ben	Cait
Net sales revenue
Variable costs
Contribution margin

Now calculate the contribution margin ratio for each sales representative. (Round to two decimal

placeslong dashthe

nearest hundredth

percentlong dashX.XX%.)

		/		=	Contribution margin ratio
Archie		/		=		%
Ben		/		=		%
Cait		/		=		%

Requirement 2. Which sales representative has the highest contribution margin ratio? Explain why.

Ben

Archie

Cait

is the sales representative with the highest contribution margin ratio because this representative

had the highest level of variable costs.

had the highest sales revenue for the period.

had the lowest level of fixed costs.

sold the most chairs, which have the higher contribution margin as compared to tables.

sold the most tables, which have the higher contribution margin as compared to chairs.

Choose from any list or enter any number in the input fields and then continue to the next question.