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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 Lime $514,000 $ 273,500 189,000 124,400 Nina $229,000 100,600 128,400 122,750 Total $1,016,500 414,000 602,500 547,000 55,500 325,000 149, 100 262,000 162,250 $ 63,000 $ (13,150) $ 5,650 $ a. What would Rock's profit margin be if the Lime division were dropped?
What would be Rock's profit margin be if the Nina division were dropped?
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