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can someone show working out for answers b and then c please Simon Hinson Company operates two divisions: Gordon and Ronin. A segmented profit and
can someone show working out for answers b and then c please
Simon Hinson Company operates two divisions: Gordon and Ronin. A segmented profit and loss statement for the company's most recent year is as follows: Total company Gordon division Ronin division Sales $850 000 $250 000 $600 000 Less variable expenses 505 000 145 000 360 000 Contribution margin $345 000 $105 000 $240 000 Less traceable fixed costs 145 000 45 000 100 000 Division segment margin $200 000 $ 60 000 $140 000 Less common fixed costs 130 000 Net profit $ 70 000 a) If the Gordon Division increased its sales by $85 000 per year, how much would the company's net profit change? Assume that all cost behaviour patterns remained constant. b) Assume that the Ronin Division increased sales by $100 000, the Gordon Division sales remained the same, and there was no change in fixed costs. i) Calculate the net profit amounts for each division and the total company. ii) Calculate the segment margin ratios before and after these changes and comment on the results. Explain the changes. c) How do the sales increases and decreases impact divisional contribution margin ratio and segment margin ratio
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