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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 $ 512,000 187,000 325,000 268,000 $ 57,000 Lime Nina 271,000 $230,000 124,500 100,700 146,500 129,300 166,250 105,750 $ (19,750) $ 23,550 Total $ 1,013,000 412,200 600,800 540,000 60,800 a. What would Rock's profit margin be if the Lime division were dropped? b. What would Rocks profit margin be if the Nina division were dropped
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