TIF 6-3 Communication Bon Jager Inc. manufactures and sells medical devices used
ID: 2516974 • Letter: T
Question
TIF 6-3 Communication Bon Jager Inc. manufactures and sells medical 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 $216,000 Martin $480,000 264,000 $216,000 Manufacturing margin... Variable selling expenses: 72,000 56.000 $128,000 S 88,000 43,200 67.200 $110.400 $105,600 Variable sales commission expenses Manufacturing margin as a percent of sales 54% 45% 22%2 Write a brief memo to Anna Berenson, the Vice President of Marketing, evaluating the performance of the company's salespeople and providing recommendations on how the salespeople could improve profitability.Explanation / Answer
Explanation
Dean has good Performance than Martin's performance.
Dean had better Manufacturing Margin than Martin's. Higher the gross margin signify the more efficient team and Productivity.
As per the data - Contribution margin (Sales - Variable Cost) for both sales person is same but manufacturing margin (Sales - Cost of Goods sold) which is higher by 9% (54% - 45%).
Recommendation to increase profitability is to decrease the cost of goods sold and Increase in sales by advertising, Discount, Offers, rewarda etc.
Hence Dean is Performing better and he is generating more productivity.
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