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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 Contribution Margin Fixed Costs (allocated) Profit Margin Granite Lino Nina Total $509,000 $272,500 $226,000 190,000 124,000 100,100 $1,007,500 414,100 319,000 148,500 125,900 593,400 269,000 158,250 117,750 545,000 $ 50,000 $ (9,750) $ 8,150 $ 48,400 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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