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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
Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable. Following is the income statement for the previous year: Sales Granite Line $514,000 $271,500 Nina $228,000 Total $1,013,500 Variable Costs 178,800 124,200 100, 200 402,400 Contribution Margin 336,000 147,300 127,800 611,100 Fixed Costs (allocated) 267,000 154,250 122,750 544,000 Profit Margin $ 69,000 $ (6,950) $ 5,050 67,100 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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