Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable. Following is the income statement for theprevious year:SalesVariable CostsContribution MarginFixed Costs (allocated)Profit MarginGraniteLineNinaTotal$503,000 $273,500 $228,000 $1,004,500194,000309,000267,000$ 42,000124,200149,300168,250100,700127,300107,750$(18.950) $19,550415,900585,600545,00042,600a. What would Rock's profit margin be if the Lime division were dropped?b. What would Rock's profit margin be if the Nina division were dropped? b. What would Rock's profit margin be if the Nina division were dropped?

Contribution means the difference between the sale and variable cost. Net operating income means the…

Answered: Rock Inc. has three divisions, Granite,…

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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Required information [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (11,200 units at $280 each) Variable costs (11,200 units at $210 each) Contribution margin Fixed costs Income $ 3,136,000 2,352,000 784,000 567,000 $ 217,000 1. Compute break-even point in units. 2. Compute break-even point in sales dollars. 1. Break-even units 2. Break-even sales dollars units
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