Huntswell Corporation has two major divisions: Agricultural Products and Industrial Products. It provides the following information for the year.

	Agriculture Division	Industrial Division
Net sales	$140,000	$1,250,000
Operating income	$17,600	$218,000
Average assets	$340,000	$5,500,000

Calculate the profit margin for the Industrial Division of the company. (Round your answer to two decimalplaces.)

A.

17.44%

B.

3.96%

C.

5.18%

D.

12.57%

Macaulay Roller Skates has three product

lineslong dashD,

E, and F. The following information is available:

	D	E	F
Sales revenue	$70,000	$60,000	$31,000
Variable costs	(30,000)	(10,000)	(12,000)
Contribution margin	$40,000	$50,000	$19,000
Fixed costs	(15,000)	(10,000)	(24,000)
Operating income (loss)	$25,000	$40,000	$(5,000)

The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Macaulay drops product line F and does not replace it, what effect will this have on operating income?

A.

Operating income will increase $5,000.

B.

Operating income will increase $19,000.

C.

Operating income will increase $24,000.

D.

Operating income will decrease $19,000.