Question

Salespersons' Report and Analysis

Walthman Industries Inc. employs seven salespersons to sell and distribute its product throughout the state. Data taken from reports received from the salespersons during the year ended December 31 are as follows:

Salesperson	Total Sales		Variable Cost of Goods Sold			Variable Selling Expenses
Case	$615,000		$313,650			$86,100
Dix	503,000		246,470			75,450
Johnson	585,000		274,950			111,150
LaFave	475,000		247,000			95,000
Orcas	409,000		171,780			61,350
Sussman	507,000		207,870			65,910
Willbond	397,000		146,890			87,340

Required:

1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. Round percents to the nearest whole number. Enter all amounts as positive numbers.

Answer 1

We have prepared a table to show all the calculations

For the simplicity, we have denoted Total Sales by ( A ) , Variable Cost of Goods Sold by ( B ) , Variable selling Expenses by ( C ), Total Variable Cost by D, Contribution Margin by E, Variable Cost of Goods Sold as a Percent of Sales by F , Variable Selling Expenses as percent of Sales by G and Contribution Margin Ratio by salesperson by HWhere, Contribution Margin is computed by deducting Total Variable Cost from Total Sales

and Total Variable Cost is sum of Variable Cost of Goods Sold and Variable Selling Expense

Contribution Margin = Total Sales - Total Variable Cost

Total Variable Cost = Variable Cost of Goods Sold + Variable Selling Expense

Variable Cost of Goods Sold as percent of Sales is computed by dividing variable cost of goods sold by sales and multiplying with 100

Variable Cost of Goods Sold as percent of Sales = (Variable Cost of Goods Sold / Sales) X 100

Variable Selling Expense as percent of Sales is computed by dividing variable selling expense by sales and multiplying with 100

Variable Selling Expense as percent of Sales = (Variable Selling Expense / Sales) X 100

Contribution Margin Ratio by Salesperson is computed by dividing the Contribution Margin by Total Sales and multiplying with 100

Contribution Margin Ratio = (Contribution Margin Ratio / Total Sales) X 100