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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: Nina Sales
Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable. Following is the income statement for the previous year: Nina Sales Variable Costs Contribution Margin Fixed Costs (allocated) Profit Margin Granite $500,000 175,000 325,000 275,000 $ 50,000 Lime $275,000 $225,000 125,000 100,000 150,000 125,000 151,250 123,750 $ (1,250) $ 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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