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Ashville Company Segmented Income Statements For the Current Fiscal Year Ended December 31, Bikes Division Trikes Division Sales $2,400,000 $1,000,000 Cost of goods sold $1,400,000 $530,000 Gross margin $1,000,000 $470,000 Allocated overhead (from $270,000 $170,000 corporate) Selling and administrative $190,000 $140,000 expenses Operating income $540,000 $160,000 Income tax expense (40%) $216,000 $64,000 Net income $324,000 $96,000 Using the segmented income statements, what is the profit margin ratio for the Trikes Division? a. 47% b. 53% c. 9.6% d. 16.0% e. None of the answer choices is correct.

Ashville Company Segmented Income Statements For the Current Fiscal Year Ended December 31, Bikes Division Trikes Division Sales $2,400,000 $1,000,000 Cost of goods sold $1,400,000 $530,000 Gross margin $1,000,000 $470,000 Allocated overhead (from $270,000 $170,000 corporate) Selling and administrative $190,000 $140,000 expenses Operating income $540,000 $160,000 Income tax expense (40%) $216,000 $64,000 Net income $324,000 $96,000 Using the segmented income statements, what is the profit margin ratio for the Trikes Division? a. 47% b. 53% c. 9.6% d. 16.0% e. None of the answer choices is correct.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ashville Company Segmented Income Statements For the Current Fiscal Year Ended December 31, Bikes Division Trikes Division Sales $2,400,000 $1,000,000 Cost of goods sold $1,400,000 $530,000 Gross margin $1,000,000 $470,000 Allocated overhead (from $270,000 $170,000 corporate) Selling and administrative $190,000 $140,000 expenses Operating income $540,000 $160,000 Income tax expense (40%) $216,000 $64,000 Net income $324,000 $96,000 Using the segmented income statements, what is the profit margin ratio for the Trikes Division? a. 47% b. 53% c. 9.6% d. 16.0% e. None of the answer choices is correct.
Transcribed Image Text:Ashville Company Segmented Income Statements For the Current Fiscal Year Ended December 31, Bikes Division Trikes Division Sales $2,400,000 $1,000,000 Cost of goods sold $1,400,000 $530,000 Gross margin $1,000,000 $470,000 Allocated overhead (from $270,000 $170,000 corporate) Selling and administrative $190,000 $140,000 expenses Operating income $540,000 $160,000 Income tax expense (40%) $216,000 $64,000 Net income $324,000 $96,000 Using the segmented income statements, what is the profit margin ratio for the Trikes Division? a. 47% b. 53% c. 9.6% d. 16.0% e. None of the answer choices is correct.
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