(Solved): Territory and product profitability analysis Territory and Product Profitability Analysis Pipeline ...

Territory and Product Profitability Analysis Pipeline Surfboards the. manufoctures and sells two styles of surfboards, Atiantic Wave and Pacific Pounder. These surfboards are sold in two regions, East Coast and West Coast. Information about the two surfboards is as follows: The sales unit volume for the sales territories and products for the period is as follows: a. Prepare a contnbution margin by sales ternitory report. Compute the conthbution margin ratio for each territory. Round contribution margin ratio answers to two decimal places. Pipeline Surfboards Inc. Contribution Margin by Territory b. What advice would you give to the management of Pipeline Surfboards regarding the relative profitability of the two territories? The total contribution margin is for the East Coast, while the contribution margin ratio is for West Coast. This is because East Coast sells only Atiantic Wave, which have a contribution margin per unit. In attempting to improve the company's profitability, it is that changing the mix of products to the two territories will have much effect. In addition, the variable selling expenses per unit for the may be too high.