Territory and Product Profitability AnalysisCoast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboards are sold in two regions, East Coastand West Coast. Information about the two surfboards is as follows:Atlantic WavePacific PounderSales priceVariable cost of goods sold per unitManufacturing margin per unitVariable selling expense per unitContribution margin per unitThe sales unit volume for the territories and products for the period is as follows:East Coast West Coast3,10001,5501,550Atlantic WaveEast Coast$350(130)$220(157)$63Pacific Pounder$300(147)$153a. Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory as a whole percent, rounded to two decimalplaces, if required.Coast to Coast Surfboards Inc.Contribution Margin by TerritoryWest Coast(87)$66 Pacific Pounder0Contribution margin ratio1,550a. Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory as a whole percent, rounded to two decimalplaces, if required.Coast to Coast Surfboards Inc.Contribution Margin by TerritoryEast CoastWest Coastdatgooodá%b. What advice would you give to the management of Coast to Coast Surfboards regarding the relative profitability of the two territories?The total contribution margin isfor the East Coast, while the contribution margin ratio iscontribution margin ratio but aEast Coast sells only Atlantic Wave, which have aattempting to improve the company's profitability, it isthe variable selling expenses per unit for thefor West Coast. This is becausecontribution margin per unit. Inthat changing the mix of products to the two territories will have much effect. In addition,may be too high.

Cost to cost Surfboards Inc. Contribution Margin By Territory East Coast West Coast A. Sales…

Territory and Product Profitability Analysis Coast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboards are sold in two regions, East Coas and West Coast. Information about the two surfboards is as follows: Atlantic Wave Pacific Pounder Sales price Variable cost of goods sold per unit Manufacturing margin per unit Variable selling expense per unit Contribution margin per unit The sales unit volume for the territories and products for the period is as follows: East Coast West Coast 3,100 0 Atlantic Wave 1,550 1,550 Pacific Pounder $300 (147) $153 (87) $66 $350 (130) $220 (157) $63 a. Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory as a whole percent, rounded to two decimal places, if required.

Territory and Product Profitability Analysis Coast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboards are sold in two regions, East Coas and West Coast. Information about the two surfboards is as follows: Atlantic Wave Pacific Pounder Sales price Variable cost of goods sold per unit Manufacturing margin per unit Variable selling expense per unit Contribution margin per unit The sales unit volume for the territories and products for the period is as follows: East Coast West Coast 3,100 0 Atlantic Wave 1,550 1,550 Pacific Pounder $300 (147) $153 (87) $66 $350 (130) $220 (157) $63 a. Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory as a whole percent, rounded to two decimal places, if required.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 13E

See similar textbooks

Similar questions

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: Atlantic Wave Pacific Pounder Sales price Variable cost of goods sold per unit Manufacturing margin per unit Variable selling expense per unit Contribution margin per unit The sales unit volume for the sales territories and products for the period is as follows: East Coast West Coast 2,960 Line Item Description Sales Variable cost of goods sold Manufacturing margin Variable selling expenses Contribution margin 0 Pipeline Surfboards Inc. Contribution Margin by Territory Contribution margin ratio 1,480 1,480 Atlantic Wave 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. $ $300 (111) $189…
Sales territory and salesperson profitability analysis Reyes Industries Inc. manufactures and sells a variety of commercial vehicles in the Northeast and South west regions. There are two salespersons assigned to each territory. Highercommission rates go to the most experienced salespersons. The following sales statisticsare available for each salesperson: Northeast Southwest Cassy G. Todd Tim JeffAverage per unit:Sales price . . . . . . . . . . . . . . . . . . . . . . . . . $96,000 $84,000 $108,000 $78,000Variable cost of goods sold . . . . . . . . . . . 57,600 33,600 64,800 31,200Commission rate . . . . . . . . . . . . . . . . . . . . .12% 16% 16% 12%Units sold . . . . . . . . . . . . . . . . . . . . . . . . . . .28 24 24 38Manufacturing margin ratio . . . . . .…
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: Atlantic Wave Pacific Pounder Sales price Variable cost of goods sold per unit Manufacturing margin per unit Variable selling expense per unit Contribution margin per unit) The sales unit volume for the sales territories and products for the period is as follows: East Coast West Coast 2,460 1,230 1,230 Atlantic Wave Pacific Pounder 0 Pipeline Surfboards Inc. Contribution Margin by Territory Line Item Description Salee $450 (167) $283 (184) $99 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. $400 (188) $212 (100) $112 East Coast West Coast
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: a. 1. Prepare a contribution margin by salesperson report. Compute the contribution margin ratio for each salesperson. 2. Interpret the report. b. 1. Prepare a contribution margin by territory report. Compute the contribution margin for each territory as a percent, rounded to one decimal place. 2. Interpret the report.
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 Contribution margin ratio Rene % Steve % Northeast Rene Colleen Steve % $15,500 $16,000 $14,000 $18,000 $9,300 $8,000 $8,400 $9,000 8% 12% 10% 36 40% $ 24 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 Paul Southwest Colleen % Paul 40 40% 8% 60 50%
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 Manufacturing margin cat Northeast Southwest Rene Steve Colleen Paul $15,500 $16,000 $14,000 $18,000 $8,000 $5,400 19.000 n 126 10% 60 a a. 1. Prepare a contribution margin by salesperson report. Compute the contribution margin ratio for each salesperson.
Companywide and Segment Break-Even Analysis Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown below: Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region.
Carol Components operates a Production Division and a Packaging Division. Both divisions are evaluated as profit centers. Packaging buys components from Production and assembles them for sale. Production sells many components to third parties in addition to Packaging. Selected data from the two operations follow: Capacity (units) Sales price Variable costsb Fixed costs a For Production, this is the price to third parties. b For Packaging, this does not include the transfer price paid to Production. Suppose Production is located in Country A with a tax rate of 30 percent and Distribution in Country B with a tax rate of 10 percent. All other facts remain the same. a. Optimal transfer price b. Transfer price c Transfer price Required: a. Current output in Production is 25,300 units. Packaging requests an additional 5,960 units to produce a special order. What transfer price would you recommend? to search b. Suppose Production is operating at full capacity. What transfer price would you…
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format segmented income statement as shown below: Required:1. Compute the companywide break-even point in dollar sales.2. Compute the break-even point in dollar sales for the East region.3. Compute the break-even point in dollar sales for the West region.4. Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. Use the same format as shown above. What is Crossfire’s net operating income (loss) in your new segmented income statement?5. Do you think that Crossfire should allocate its common fixed expenses to the East and West regions when computing the break-even points for each region? Why?
Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown below: Required:1. Compute the companywide break-even point in dollar sales.2. Compute the break-even point in dollar sales for the North region.3. Compute the break-even point in dollar sales for the South region.
General Transfer Pricing Rule Scottsdale Manufacturing is organized into two divisions:Fabrication and Assembly. Components transferred between the two divisions are recorded at a predetermined transfer price. Standard variable manufacturing cost per unit in the Fabrication Divisionis $500. At the present time, this division is working to capacity. Fabrication estimates that the unitsit produces could be sold on the external market for $650. The product under consideration is viewedas a commodity-type product, with no differentiating features or characteristics.Required1. What roles are played by transfer prices? That is, why are transfer prices needed?2. Use the general transfer pricing rule presented in the chapter to determine an appropriate transfer price.Why is the amount you calculated considered an appropriate transfer price?3. What if the Fabrication Division had excess capacity? How would this change the indicated transferprice? Why is the amount you determined considered an…
Contribution margin by segment The following information is for LaPlanche Industries Inc.: Determine the contribution margin for (A) Product YY and (B) West Region.