Rock inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavo

Question

Rock inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable Following is the income statement for the previous year me Nna Sales Variable Costs Contribution Margin Fixed Costs (allocated) Profit Margin $ 507,000 274,000 $ 228,000 $ 1,009,000 178,000 124.200 100,900403,100 605,900 544,000 -0,000. S (14,450 ) $ 6,350 S 61.900 329,000149.800 127,100 259,000164.250 120,750 1,0 a. What wouid Rock's profit margin be it the Lime division were dropped? b. What woutd Rock's prott margin be t the Nina divsion were dropped?:

Explanation / Answer

a Profit margin=61900-149800= $87900 Loss b Profit margin=61900-127100= $65200 Loss

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