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 Coast and West Coast. Information about the two surfboards is as follows: Atlantic WavePacific PounderSales price$350 $250Variable cost of goods sold per unit(130)(115)Manufacturing margin per unit$220 $135 Variable selling expense per unit(157)(70)Contribution margin per unit$63 $65The sales unit volume for the territories and products for the period is as follows: East CoastWest coast Atlantic Wave2,7801,390Pacific Pounder01390 **Prepare a Contribution Margin by Sales Territory Report**Instructions: Compute the contribution margin ratio for each territory as a whole percent, rounded to two decimal places, if required.**Coast to Coast Surfboards Inc.****Contribution Margin by Territory**| | East Coast | West Coast ||------------------------------|------------|------------|| **Sales** | $ | $ || **Variable cost of goods sold** | $ | $ || **Manufacturing margin** | $ | $ || **Variable selling expenses**| $ | $ || **Contribution margin** | $ | $ || **Contribution margin ratio**| % | % |This table is used for calculating the contribution margin and its ratio for different sales territories. It includes columns for East Coast and West Coast data, such as sales, variable costs, manufacturing margin, and other relevant financial metrics. Fill in the values to find out the financial performance by territory.

In the contribution margin income statement, we need to deduct all the variable expenses from the sales to get the contribution margin and after deducting fixed expenses we get operating income. Working

Answered: Coast to Coast Surfboards Inc.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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 Coast and West Coast. Information about the two surfboards is as follows:

	Atlantic Wave	Pacific Pounder
Sales price	$350	$250
Variable cost of goods sold per unit	(130)	(115)
Manufacturing margin per unit	$220	$135
Variable selling expense per unit	(157)	(70)
Contribution margin per unit	$63	$65

The sales unit volume for the territories and products for the period is as follows:

	East Coast	West coast
Atlantic Wave	2,780	1,390
Pacific Pounder	0	1390

**Prepare a Contribution Margin by Sales Territory Report**

Instructions: Compute the contribution margin ratio for each territory as a whole percent, rounded to two decimal places, if required.

**Coast to Coast Surfboards Inc.**

**Contribution Margin by Territory**

| | East Coast | West Coast |
|------------------------------|------------|------------|
| **Sales** | $ | $ |
| **Variable cost of goods sold** | $ | $ |
| **Manufacturing margin** | $ | $ |
| **Variable selling expenses**| $ | $ |
| **Contribution margin** | $ | $ |
| **Contribution margin ratio**| % | % |

This table is used for calculating the contribution margin and its ratio for different sales territories. It includes columns for East Coast and West Coast data, such as sales, variable costs, manufacturing margin, and other relevant financial metrics. Fill in the values to find out the financial performance by territory.

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