Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Question
Chapter 7, Problem 13E
A.
To determine
Calculate the contribution margin ratio for each territory.
B.
To determine
State the advice regarding the relative profitability of two territories.
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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:
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Pipeline Surfboards Inc.
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Line Item Description
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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
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East Coast West Coast
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
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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
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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.
$
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(111)
$189…
Coast to Coast Surfboards Inc. manufactures and sells two
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These surfboards are sold in two regions, East Coast and
West Coast. Information about the two surfboards is as
follows:
Sales price
Variable cost of goods sold per unit
Manufacturing margin per unit
Variable selling expense per unit
Contribution margin per unit
Atlantic Wave
Pacific Pounder
East Coast West Coast
The sales unit volume for the territories and products for
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3,440
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1,720
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Coast to Coast Surfboards Inc.
Contribution Margin by Territory
Atlantic Wave
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.
%
$300
(111)
$189
(129)
$60
East Coast West Coast
$
$
Pacific Pounder
$250
(118)
$132
(67)
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b. What advice would you give to the management of
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Chapter 7 Solutions
Managerial Accounting
Ch. 7 - What types of costs are customarily included in...Ch. 7 - Which type of manufacturing cost (direct...Ch. 7 - Which of the following costs would be included in...Ch. 7 - In the variable costing income statement, how are...Ch. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Discuss how financial data prepared on the basis...Ch. 7 - Prob. 8DQCh. 7 - Explain why rewarding sales personnel on the basis...Ch. 7 - Explain why service companies use different...
Ch. 7 - Variable costing Marley Company has the following...Ch. 7 - Prob. 2BECh. 7 - Variable costingsales exceed production The...Ch. 7 - Prob. 4BECh. 7 - Contribution margin by segment The following...Ch. 7 - At the end of the first year of operations, 21,500...Ch. 7 - Gallatin County Motors Inc. assembles and sells...Ch. 7 - Fresno Industries Inc. manufactures and sells...Ch. 7 - On March 31, the end of the first month of...Ch. 7 - On April 30, the end of the first month of...Ch. 7 - On October 31, the end of the first month of...Ch. 7 - The following data were adapted from a recent...Ch. 7 - Estimated income statements, using absorption and...Ch. 7 - The following data were adapted from a recent...Ch. 7 - Prob. 10ECh. 7 - Explain why service companies use different...Ch. 7 - Galaxy Sports Inc. manufactures and sells two...Ch. 7 - Prob. 13ECh. 7 - Sales territory and salesperson profitability...Ch. 7 - Prob. 15ECh. 7 - Prob. 16ECh. 7 - Variable costing income statement for a service...Ch. 7 - Variable costing income statement for a service...Ch. 7 - Prob. 1PACh. 7 - The demand for solvent, one of numerous products...Ch. 7 - During the first month of operations ended May 31,...Ch. 7 - Salespersons report and analysis Walthman...Ch. 7 - Segment variable costing income statement and...Ch. 7 - Absorption and variable costing income statements...Ch. 7 - Income statements under absorption costing and...Ch. 7 - Absorption and variable costing income statements...Ch. 7 - Prob. 4PBCh. 7 - Variable costing income statement and effect on...Ch. 7 - Prob. 1MADCh. 7 - Prob. 2MADCh. 7 - Prob. 3MADCh. 7 - Segment disclosure by Apple Inc. (AAPL) provides...Ch. 7 - Prob. 1TIFCh. 7 - Inventory effects under absorption costing BendOR,...Ch. 7 - Communication Bon Jager Inc. manufactures and...Ch. 7 - Prob. 1CMACh. 7 - Chassen Company, a cracker and cookie...Ch. 7 - Prob. 3CMACh. 7 - Bethany Company has just completed the first month...
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