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Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable Following is the income statement for the previous year: Sales Variable
Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable Following is the income statement for the previous year: Sales Variable Costs Contribution Margin Fixed Costs (allocated) Profit Margin Granite $ 500,000 175,000 325,000 275,000 $ 50,000 Lime $275,000 125,000 150,000 151,250 $ (1,250 ) Nina $225,000 100,000 125,000 123,750 $ 1,250 Total $1,000,000 400,000 600,000 550,000 $ 50,000 a. What would Rock's profit margin be if the Lime division were dropped? b. What would Rock's profit margin be if the Nina division were dropped
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