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: Pacific Pounder Atlantic Wave Sales price $400 $350 Vanable cost of goods sold per unit (148) (172) Manufacturing margin per unit $252 $178 Variable selling expense per unit (164) (87) Contribution margin per unit $88 $91 The sales unit volume for the sales territories and products for the period is as follows: Atlantic Wave Pacific Pounder East Coast West Coast 3,580 0 1,790 1,790 a. Prepare a contribution margin by sales terntory report. Compute the contribution margin ratio for each terntory. Round contribution margin ratio answers to two decimal places. Pipeline Surfboards Inc. Contribution Margin by Territory Line Item Description East Coast West Coast Contribution margin ratio. % b. What advice would you give to the management of Pipeline Surfboards regarding the relative profitability of the two territories? for the East Coast, while the contribution margin ratio ist The total contribution margin is unit. In attempting to improve the company's profitability, it is for West Coast. This is because East Coast sells only Atlantic Wave, which have a that changing the mix of products to the two territories will have much effect. In addition, the variable selling expenses per unit for the contribution margin per may be too high. Previous Next