Sales Territory and Salesperson Profitability Analysis Havasu Off-Road Inc. manufactures and sells a variety of commercial vehicles in the Northeast and Southwest reglons. 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 Rene Steve Colleen Paul Average per unit: Sales price $15,500 $16,000 $14,000 $18,000 Variable cost of goods sold $9,300 $8,000 $8,400 $9,000 Commission rate 12% 8% Units sold 36 40 Manufacturing margin ratio 40% 50% 50% 8% 10% 24 60 40% 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 Rene Steve Colleen Paul % % % Contribution margin ratio % a. 2. Interpret the report. Paul earns the contribution margin and has the contribution margin ratio. This is because he sells the units, has a commission rate, and sells a product mix with a manufacturing margin. Steve also sells products with a average manufacturing margin but at a commission rate. Colleen has the contribution margin ratio among the four salespersons. Although Rene has a high variable cost of goods sold and also sells products with a average sales price per unit, she has the second total contribution margin. 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 Northeast Southwest Contribution margin ratio b. 2. Interpret the report. The Southwest Region has $[ more sales and s more contribution margin. In the Southwest Region, the salesperson with the highest sales unit volume, has the contribution margin ratio. The Southwest Region has the performance, even though it also has the salesperson with the contribution margin ratio. The Northeast Region contribution margin is than the Southwest Region because of the outstanding performance of