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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 Costs (allocated) Profit Margin Granite $512,000 177,000 335,000 263,000 $ 72,000 Lime Nina $ 271,000 $ 228,000 124,300 100,300 146,700 127,700 160,250 121,750 $ (13,550) $ 5,950 Total $1,011,000 401,600 609,400 545,000 64,400 a. What would Rock's profit margin be if the Lime division were dropped? Loss b. What would Rock's profit margin be if the Nina division were dropped? Loss
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