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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 Costs Contribution Margin Fixed Costs (allocated) Profit Margin Granite. Lime Nina Total $517,000 $272,000 $226,000 $1,015.000 190,000 124,500 100,500 415,000 327,000 147,500 125,500 600,000 259,000 169,250 106,750 535,000 $ 68,000 $(21,750) $ 18,750 $ 65,000 a. What would Rock's profit margin be if the Lime division were dropped? Loss TS 12 b. What would Rock's profit margin be if the Nina division were dropped?

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. Lime Nina Total $517,000 $272,000 $226,000 $1,015.000 190,000 124,500 100,500 415,000 327,000 147,500 125,500 600,000 259,000 169,250 106,750 535,000 $ 68,000 $(21,750) $ 18,750 $ 65,000 a. What would Rock's profit margin be if the Lime division were dropped? Loss TS 12 b. What would Rock's profit margin be if the Nina division were dropped?

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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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 Loss Granite. Line Nina Total $517,000 $272,000 $226,000 $1,015.000 190,000 124,500 100,500 415,000 600,000 535,000 65,000 $ 12 327,000 125,500 259,000 106,750 $ 68,000 $(21,750) $ 18,750 $ a. What would Rock's profit margin be if the Lime division were dropped? 147,500 169,250 b. What would Rock's profit margin be if the Nina division were dropped?
Transcribed Image Text: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 Loss Granite. Line Nina Total $517,000 $272,000 $226,000 $1,015.000 190,000 124,500 100,500 415,000 600,000 535,000 65,000 $ 12 327,000 125,500 259,000 106,750 $ 68,000 $(21,750) $ 18,750 $ a. What would Rock's profit margin be if the Lime division were dropped? 147,500 169,250 b. What would Rock's profit margin be if the Nina division were dropped?
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