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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
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 solesperson: a. 1. Prepare a contribution margin by solesperson report. Compute the contribution margin ratio for each salesperson. Havasu Off-Road Inc. Contribution Margin by Salesperson a. 2. Interpret the report. Paul earns the I 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 ot 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 selis 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 b. 2. Interpret the report. The Southwest Region has s more sales and 5 mare 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
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