Tables Chairs Sales Price $ 800 600 S 70 25 Variable manufacturing costs Sales commission (10%) 80

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Analyzing profitability

Father Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow:

Father Furniture has three sales representatives: Adam, Ben, and Caleb. Adam sold 100 tables With 6 chairs each. Ben sold 110 tables With 4 chairs each. Caleb sold 80 tables with 8 chairs each.

Requirements

  1. Calculate the total contribution margin and the contribution margin ratio for each sales representative (round to two decimal places).
  2. Which sales representative has the highest contribution margin ratio? Explain Why
Tables
Chairs
Sales Price
$ 800
600
S 70
25
Variable manufacturing costs
Sales commission (10%)
80
Transcribed Image Text:Tables Chairs Sales Price $ 800 600 S 70 25 Variable manufacturing costs Sales commission (10%) 80
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