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	$450	$400
Variable cost of goods sold per unit	(167)	(196)
Manufacturing margin per unit	$283	$204
Variable selling expense per unit	(193)	(100)
Contribution margin per unit	$90	$104

The sales unit volume for the sales territories and products for the period is as follows:

Product	East Coast	West Coast
Atlantic Wave	3,340	1,670
Pacific Pounder	0	1,670

Question Content Area

a. Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory. Round contribution margin ratio answers to two decimal places.

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%