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 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 3,500 1,750 1,750 0 Atlantic Wave Pacific Pounder Line Item Description Sales ✓ Variable cost of goods sold Manufacturing margin Variable selling expenses Contribution margin 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. Pipeline Surfboards Inc. Contribution Margin by Territory Contribution margin ratio ✓ ✓ ✓ -✓ $ $400 (148) $ $252 (180) $72 East Coast 1,400,000 ✓ $350 (172) % $178 (101) $77 West Coast 1,312,500 ✓ %

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 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 3,500 1,750 1,750 0 Atlantic Wave Pacific Pounder Line Item Description Sales ✓ Variable cost of goods sold Manufacturing margin Variable selling expenses Contribution margin 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. Pipeline Surfboards Inc. Contribution Margin by Territory Contribution margin ratio ✓ ✓ ✓ -✓ $ $400 (148) $ $252 (180) $72 East Coast 1,400,000 ✓ $350 (172) % $178 (101) $77 West Coast 1,312,500 ✓ %

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

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