Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Clay Inc. has two divisions, Myrtle and Laurel. Following is the income statement for the previous year: Myrtle Laurel Total Sales $ 560,400 $ 336,500
Clay Inc. has two divisions, Myrtle and Laurel. Following is the income statement for the previous year: Myrtle Laurel Total Sales $ 560,400 $ 336,500 $ 896,900 Variable Costs 176,500 174,400 350,900 Contribution Margin 383,900 162,100 546,000 Fixed Costs (allocated) 284,675 171,125 455,800 Profit Margin $ 99,225 $ (9,025 ) $ 90,200 What would Clays profit margin be if the Laurel division was dropped and all fixed costs are unavoidable? $90,200 profit $71,900 loss $383,900 profit $99,225 profit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started