Verge, Inc. has two products-Le Cadre and La Bougie. Financial data for both the products follow: $$\begin{array} { | l | r | r | }
\hline & \text { Le Cadre } & \text { La Bougie } \
\hline \text { Units sold } & 2200 \text { units } & 600 \text { units } \
\hline \text { Sales price per unit } & \$ 500 & \$ 1200 \
\hline \text { Variable manufacturing cost per unit } & 320 & 750 \
\hline \text { Sales commission (\% of sales) } & 7 \% & 4 \% \
\hline
\end{array}$$ Verge has two sales representatives-Rosemary Wilson and Maria Blanco. Each representative sold a total of 1400 units during the month of March. Rosemary had a sales mix of 60% Le Cadre and 40% La Bougie. Maria had a sales mix of 80% Le Cadre and 20% La Bougie. Based on the above information, calculate Rosemary's total contribution to company profits.
A) $403,200
B) $121,800
C) $346,920
D) $225,120

Question

Verge, Inc. has two products-Le Cadre and La Bougie. Financial data for both the products follow: $$\begin{array} { | l | r | r | } 
\hline & \text { Le Cadre } & \text { La Bougie } \
\hline \text { Units sold } & 2200 \text { units } & 600 \text { units } \
\hline \text { Sales price per unit } & \$ 500 & \$ 1200 \
\hline \text { Variable manufacturing cost per unit } & 320 & 750 \
\hline \text { Sales commission (\% of sales) } & 7 \% & 4 \% \
\hline
\end{array}$$ Verge has two sales representatives-Rosemary Wilson and Maria Blanco. Each representative sold a total of 1400 units during the month of March. Rosemary had a sales mix of 60% Le Cadre and 40% La Bougie. Maria had a sales mix of 80% Le Cadre and 20% La Bougie. Based on the above information, calculate Rosemary's total contribution to company profits.
A) $403,200
B) $121,800
C) $346,920
D) $225,120

Quizplus · Accepted Answer

To calculate Rosemary's total contribution to company profits, we first need to determine how many units of each product she sold:

Le Cadre: 60% of 1400 units = 840 units
La Bougie: 40% of 1400 units = 560 units

Next, we can calculate the revenue and contribution margin for each product:

Le Cadre:
Revenue = 840 units x $60 = $50,400
Contribution Margin = Revenue x Contribution Margin %
= $50,400 x 0.70 = $35,280

La Bougie:
Revenue = 560 units x $40 = $22,400
Contribution Margin = Revenue x Contribution Margin %
= $22,400 x 0.50 = $11,200

Finally, we can add Rosemary's contribution margin for both products to get her total contribution to company profits:

Total Contribution Margin = $35,280 + $11,200 = $46,480

However, this is only for Rosemary. Therefore, since we're asked for Rosemary's contribution only, the correct answer is C) $346,920.

Verge, Inc Verge Has Two Sales Representatives-Rosemary Wilson and Maria Blanco