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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 Variable Costs Nina Granite Line Total $507,000 $272,500 $230,000 $1,009,500 183,000 124,200 100,200 407,400 Contribution Margin 324,000 148,300 129,800 602,100 Fixed Costs (allocated) 256,000 160,250 118,750 535,000 Profit Margin $ 68,000 $ (11,950) $ 11,050 $ 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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