Zen Skateboards, Inc., manufactures and sells two styles of skateboards, Street Machine and Winter Warrior. These skateboards are sold in two regions, Southern and Northern. Information about the two skateboards is as follows:

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

a. Prepare a contribution margin by sales territory report. Calculate the contribution margin ratio for each territory as a whole percent, rounded to two decimal places.
b. What advice would you give to the management of Zen Skateboards, Inc., regarding the relative profitability of the two territories?

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Street Machine Winter Warrior Sales price Variable cost of goods sold per unit Manufacturing margin per unit Variable selling expense per unit Contribution margin per unit $250 175 $ 75 $150 105 $ 45 50 25 $ 25 $ 20 Northern Southern Street Machine Winter Warrior 25,000 12,500 12,500