Folk Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture
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Folk Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow:
Folk Furniture has three sales representatives: Peter, Paul, and Mary. Peter sold 100 tables with 4 chairs each. Paul sold 70 tables with 8 chairs each. Mary 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? Explainwhy.
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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Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133255584
4th Edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
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