2. Total 17850 16350 28300
Variable Expenses
Territory 1 Territory 2 Territory 3
AdvertisingExpense(5%of net
sales) 6000 5000 9000
Credit& collection(2%of netsales) 2400 2000 3600
sales-commisionPaidtosales
person 9600 8000 14400
Supplies 1000 800 1600
General SalesSalaries(BasesOn
Sales) 4800 4000 7200
Total 23800 19800 35800
Calculating the Contributional Margin
Sales 120,000 100,000 180,000
Variable Cost 23,800 19,800 35,800
Contributional Margin 96,200 80,200 144,200
RANKING 2nd
96,200 3RD
80,200 1ST
144,200
(a) Whether a territory should be dropped or whether attempts should be
made to further develop such
(b) The responsibility for incurrence of marketing costs.
(c) Whether salespersonsshoulddiscontinue calling on a certain class of
customer.?
LINDALE ELECTRIC COMPANY
Income Statement - Profitability Analysis By Marketing C
For Year Ended- December 31