After reading the case, evaluate the performance of the salespeople and provide

Question

After reading the case, evaluate the performance of the salespeople and provide recommendations on how they could improve the company's profitability.

Bon Jager Inc. manufactures and sells mecdical devices used in cardiovascular surgery. The sales team consists of two salespeople, Dean and Martin. A contribution margin report by salesperson was prepared as follows Bon Jager Inc. Contribution Margin by Salesperson Dean $400,000 184,000 5216,000 Martin Variable cast of gaods Manufacturing margin Variable selling expenses: 264,000 216,000 $ 72.000 56,000 $128,000 88,000 Variable pramotion expenses Variable sales commission expenses 5 43,200 67 200 $110 400 105,600 Total variable selling expenses Manufacturing margin as a percent of sales (manufacturing margin ratio) marg n 54% 45% 22% 22%

Explanation / Answer

The performance of dean is better because manufacturing margin is better

Ways to improve company profitability are :

1.Buy more effectively

.when you buy more effectively than varable cost gets reduced as a result , contribution margin gets improves

2.Concentrate your sales efforts

Sales efforts include means providing discount, incentives , sales on credit basis.

3.Expand your market

use online marketing tools to expand market of your product. This market is available 24*7

4.Focus on productivity

productivity gets improve by better working condition , increases hourly wage rate

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