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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 Coats (allocated) Profit Margin Granite $514,000 179,000 335,000 258,000 $ 77,000 Lime Nina $ 272,500 $230,000 124, 200 101,000 148,300 129,000 160, 250 103,750 $ (11,950) $ 25,250 Total $1,016,500 404,200 612,300 522,000 $ 90,300 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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