Question
Pepin Inc. has two divisions, Alma and Nelson. Following is the income statement for the previous year: Alma Nelson Total Sales $560,000 $336,000 $896,000 Variable
Pepin Inc. has two divisions, Alma and Nelson. Following is the income statement for the previous year:
| Alma | Nelson | Total | |
| Sales | $560,000 | $336,000 | $896,000 |
| Variable Costs | 176,000 | 174,000 | 350,000 |
| Contribution Margin | 384,000 | 162,000 | 546,000 |
| Fixed Costs (allocated) | 284,375 | 170,625 | 455,000 |
| Profit Margin | 99,625 | -8,625 | 91,000 |
What would Pepin's profit margin be if the Nelson division was dropped?
| a. | $91,000 profit | |
| b. | $99,625 profit | |
| c. | $384,000 profit | |
| d. | $71,000 loss |
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Operational Auditing A Complete Guide Practical Tools For Self Assessment
Authors: The Art Of Service Operational Auditing Publishing
2021 Edition
1867442043, 978-1867442042
