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Clay Inc. has two divisions, Myrtle and Laurel. Following is the income statement for the previous year: Sales Variable Costs Contribution Margin Fixed Costs

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Clay Inc. has two divisions, Myrtle and Laurel. Following is the income statement for the previous year: Sales Variable Costs Contribution Margin Fixed Costs (allocated) Profit Margin Myrtle Laurel Total $561,600 $337,800 $899,400 177,900 175,500 353,400 383,700 162,300 546,000 285,975 172,425 458,400 $ 97,725 $(10,125) $ 87,600 What would Clay's profit margin be if the Laurel division was dropped and all fixed costs are unavoidable? Multiple Choice $97,725 profit $87,600 profit $383,700 profit $74,700 loss

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