Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

  • $80,000 profit

  • $41,600 profit

  • $80,000 loss

  • $0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Management System Auditors Handbook

Authors: Joe Kausek

1st Edition

087389670X, 978-0873896702

More Books

Students also viewed these Accounting questions

Question

7. List behaviors to improve effective leadership in meetings

Answered: 1 week ago

Question

6. Explain the six-step group decision process

Answered: 1 week ago