Popular Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture

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Popular Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow:

Popular Furniture Company manufactures and sells oak tables and chairs.


Popular Furniture has three sales representatives: Tom, Dick, and Harry. Tom sold 100 tables with 4 chairs each. Dick sold 70 tables with 8 chairs each. Harry sold 80 tables with 6 chairs each.

Requirements

1. Calculate the total contribution margin and the contribution margin ratio for each sales representative (round to two decimal places).

2. Which sales rep has the highest contribution margin ratio? Explain why.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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Horngrens Financial and Managerial Accounting

ISBN: 978-0133255584

4th Edition

Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura

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