Sales Territory and Salesperson Profitability Analysis Havasu Off-Road Inc. manufactures and sells a variety of commercial vehicles in the Northeast and Southwest 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: Average per unit: Sales price Variable cost of goods sold Commission rate Units sold Manufacturing margin ratio Northeast Rene Southwest Steve Colleen Paul $15,500 $16,000 $14,000 $18,000 $9,300 $8,000 $8,400 $9,000 8% 12% 10% 8% 36 24 40 60 40% 50% 40% 50% a. 1. Prepare a contribution margin by salesperson report. Compute the contribution margin ratio for each salesperson. Havasu Off-Road Inc. Contribution Margin by Salesperson Sales Variable cost of goods sold Manufacturing margin Variable commission expense Contribution margin Contribution margin ratio Rene Steve Colleen Paul % % % % b. 1. Prepare a contribution margin by territory report. Compute the contribution margin for each territory as a percent, rounded to one decimal place. Havasu Off-Road Inc. Contribution Margin by Territory Sales Variable cost of goods sold Manufacturing margin Variable commission expense Contribution margin Contribution margin ratio Feedback Check My Work b. 2. Interpret the report. Northeast Southwest $ % % The Southwest Region has $ Region has the highest outstanding performance of Paul more sales and $ more contribution margin. In the Southwest Region, the salesperson with the highest sales unit volume, has the highest performance, even though it also has the salesperson with the lowest contribution margin ratio. The Northeast Region contribution margin is less contribution margin ratio. The Southwest than the Southwest Region because of the