Analyzing profitability
Relative Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow:
Tables Chairs
Sales Price \( 1,400 \) 50
Variable manufacturing costs 1,148 21
Sales commission (8%) 112 4
Relative Furniture has three sales representatives: Abe, Brett, and Corrin. Abe sold 50 tables with 4 chairs each. Brett sold 110 tables with 6 chairs each. Corrin sold 90 tables with 8 chairs each.
Requirements:
- Calculate the total contribution margin and the contribution margin ratio for each sales representative (round to two decimal places).
- Which sales representative has the highest contribution margin ratio? Explain why.