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Power Inc. has two divisions, Windsor and Ridge. Following is the income statement for the past month: Windsor Ridge Total Sales $ 360,400 $ 320,200
Power Inc. has two divisions, Windsor and Ridge. Following is the income statement for the past month:
Windsor | Ridge | Total | |||||||
Sales | $ | 360,400 | $ | 320,200 | $ | 680,600 | |||
Variable Costs | 280,400 | 150,300 | $ | 430,700 | |||||
Contribution Margin | $ | 80,000 | $ | 169,900 | $ | 249,900 | |||
Fixed Costs (allocated) | 121,600 | 128,300 | $ | 249,900 | |||||
Profit Margin | $ | (41,600 | ) | $ | 41,600 | $ | 0 | ||
What would Power's profit margin be if the Windsor division was dropped and all fixed costs are unavoidable?
Multiple Choice
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$80,000 profit
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$41,600 profit
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$80,000 loss
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$0
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