Taconite Inc. has three divisions, Bovey, Babbit and Hoyt. Following is the income statement for the previous year: a. What would Taconite's profit margin be if the Babbit division was dropped? b. What would Taconite's profit margin be if the Hoyt division was dropped?

Total $275,000$225.000 $1,000,000 400,000 600,000 550,000 50,000 Hoyt Bovey $500,000 175,000 325,000 275,000 50,000 Babbit Sales Variable Costs Contribution Margin Fixed Costs (allocated) Profit Margin 125,000 150,000 151,250 -1,250 100,000 125,000 123,750 1,250