K Clan Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow: Click the icon to view the price and cost data.) Clan Furniture has three sales representatives: Alfred, Bob, and Cait. Alfred sold 60 tables with 8 chairs each. Bob sold 70 tables with 6 chairs each. Cait sold 100 tables with 4 chairs each. Read the requirements. Sales representative: Alfred Bob Cait Net sales revenue $ 66,000 $ 70,000 $ 90,000 47,700 Variable costs Contribution margin 52,150 69,500 $ 18,300 $ 17,850 $ 20,500 Now calculate the contribution margin ratio for each sales representative. (Round to two decimal places-the nearest hundredth percent-X.XX%.) Contribution margin ÷ Net sales revenue = Contribution margin ratio Alfred $ 18,300 " ÷ 66,000 = 27.73 % Bob $ 17,850 ÷ $ 70,000 = 25.50 % 20,500 + $ 90,000 = 22.78 % Cait $ Requirement 2. Which sales representative has the highest contribution margin ratio? Explain why. is the sales representative with the highest contribution margin ratio because this representative

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 18E
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Question
K
Clan Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow:
Click the icon to view the price and cost data.)
Clan Furniture has three sales representatives: Alfred, Bob, and Cait. Alfred sold 60 tables with 8 chairs each. Bob sold 70 tables with 6 chairs each. Cait
sold 100 tables with 4 chairs each.
Read the requirements.
Sales representative:
Alfred
Bob
Cait
Net sales revenue
$
66,000 $
70,000 $
90,000
47,700
Variable costs
Contribution margin
52,150
69,500
$
18,300 $
17,850 $
20,500
Now calculate the contribution margin ratio for each sales representative. (Round to two decimal places-the nearest hundredth percent-X.XX%.)
Contribution margin
÷
Net sales revenue = Contribution margin ratio
Alfred
$
18,300
"
÷
66,000 =
27.73
%
Bob
$
17,850 ÷ $
70,000
=
25.50 %
20,500 +
$
90,000
=
22.78
%
Cait
$
Requirement 2. Which sales representative has the highest contribution margin ratio? Explain why.
is the sales representative with the highest contribution margin ratio because this representative
Transcribed Image Text:K Clan Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow: Click the icon to view the price and cost data.) Clan Furniture has three sales representatives: Alfred, Bob, and Cait. Alfred sold 60 tables with 8 chairs each. Bob sold 70 tables with 6 chairs each. Cait sold 100 tables with 4 chairs each. Read the requirements. Sales representative: Alfred Bob Cait Net sales revenue $ 66,000 $ 70,000 $ 90,000 47,700 Variable costs Contribution margin 52,150 69,500 $ 18,300 $ 17,850 $ 20,500 Now calculate the contribution margin ratio for each sales representative. (Round to two decimal places-the nearest hundredth percent-X.XX%.) Contribution margin ÷ Net sales revenue = Contribution margin ratio Alfred $ 18,300 " ÷ 66,000 = 27.73 % Bob $ 17,850 ÷ $ 70,000 = 25.50 % 20,500 + $ 90,000 = 22.78 % Cait $ Requirement 2. Which sales representative has the highest contribution margin ratio? Explain why. is the sales representative with the highest contribution margin ratio because this representative
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