Sales territory and salesperson profitability analysis Reyes Industries Inc. manufactures and sells a variety of commercial vehicles in the North east and South west regions. There are two...

Sales territory and salesperson profitability analysis

Reyes Industries Inc. manufactures and sells a variety of commercial vehicles in the North
east and South west regions. There are two salespersons assigned to each territory. Higher
commission rates go to the most experienced salespersons. The following sales statistics
are available for each salesperson:
                                                               Northeast                 Southwest
                                                               Cassy G.  Todd           Tim        Jeff
Average per unit:
Sales price . . . . . . . . . . . . . . . . . . . . . . . . . $96,000  $84,000   $108,000 $78,000
Variable cost of goods sold . . . . . . . . . . . 57,600   33,600       64,800    31,200
Commission rate . . . . . . . . . . . . . . . . . . . . .12%       16%          16%        12%
Units sold . . . . . . . . . . . . . . . . . . . . . . . . . . .28           24             24           38
Manufacturing margin ratio . . . . . . . . . . . 40%        60%         40%         60%

a. 1. Prepare a contribution margin by salesperson report. Calculate the contribution
margin ratio for each salesperson.
2. Interpret the report.

b. 1. Prepare a contribution margin by territory report. Calculate the contribution margin
for each territory as a percent, rounded to one decimal place.
2. Interpret the report.