Big Bikes manufactures and sells mountain bikes in two sales territories, West Coast and East Coast. Information
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Question:
Big Bikes manufactures and sells mountain bikes in two sales territories, West Coast and East Coast. Information for the year follows. The company sold 540 bikes in each territory.
Per unit | West Coast | East Coast |
---|---|---|
Sales price | $ 1,300 | $ 1,200 |
Variable cost of goods sold | 760 | 760 |
Variable selling and administrative expenses | 150 | 20 |
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?
Related Book For
Financial and Managerial Accounting
ISBN: 978-1285078571
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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