Big Bikes manufactures and sells mountain bikes in two sales territories, West Coast and East Coast. Information for the year follows. The company sold 500 bikes in each territory.

a. Compute contribution margin (in dollars) for each sales territory.
b. Compute contribution margin ratio for each sales territory. Which sales territory has the better contribution margin ratio?

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Per unit Sales price....... Variable cost of goods sold.... Variable selling and administrative expenses....... West Coast $1,000 540 120 East Coast $960 540 60