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	$619,000		$346,640			$117,610
Dix	409,000		159,510			65,440
Johnson	517,000		258,500			108,570
LaFave	341,000		167,090			54,560
Orcas	555,000		277,500			116,550
Sussman	405,000		206,550			68,850
Willbond	492,000		241,080			83,640

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.

Waltham Industries Inc.
Salespersons' Analysis
For the Year Ended December 31
Salesperson	Contribution Margin	Variable Cost of Goods Sold as a Percent of Sales	Variable Selling Expenses as a Percent of Sales	Contribution Margin Ratio
Case	$	%	%	%
Dix		%	%	%
Johnson		%	%	%
LaFave		%	%	%
Orcas		%	%	%
Sussman		%	%	%
Willbond		%	%	%

2. Which salesperson generated the highest contribution margin ratio for the year?

3. Identify the factors other than contribution margin that should be considered in evaluating the performance of salespersons.

1. Rate of growth in sales for the current year compared with past years
2. Years of experience for salespersons
3. Size of sales territory
4. Actual sales compared with budgeted sales
5. All of the above

Answer 1

1.)		A	B	C	D=A-B-C	B/A	C/A	D/A
	Salesperson	Total Sales	Variable Cost of Goods Sold	Variable Selling Expenses	Contribution Margin	Variable Cost of Goods	Variable Selling Expenses	Contribution Margin
						Sold as a Percent of Sales	as a Percent of Sales	Ratio
	Case	619,000	346,640	117,610	154,750	56%	19%	25%
	Dix	409,000	159,510	65,440	184,050	39%	16%	45%
	Johnson	517,000	258,500	108,570	149,930	50%	21%	29%
	LaFave	341,000	167,090	54,560	119,350	49%	16%	35%
	Orcas	555,000	277,500	116,550	160,950	50%	21%	29%
	Sussman	405,000	206,550	68,850	129,600	51%	17%	32%
	Willbond	492,000	241,080	83,640	167,280	49%	17%	34%

2.)	Dix has generated the highest Contribution margin ratio for the year.
3.)	All of the above factors should be considered in evaluating the performance of salespersons.
	Correct answer is option 5.