What would Franklin's profit margin be if Charles were dropped?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Franklin, Inc. has two divisions, Seward and Charles. Following is the income statement for the previous year:
Seward Charles
$779,000 $779,000
537,850 662,150
$241,150 $116,850
131,450 131,450
$109,700 $(14,600)
Sales
Variable Costs
Contribution Margin
Fixed Costs
Profit Margin
Of the total fixed costs, $180,000 are common fixed costs that are allocated equally between the divisions. What would Franklin's profit margin be if Charles were dropped?
Multiple Choice
$779,000
O $19,700
O $241,150
O $109,700
Transcribed Image Text:Franklin, Inc. has two divisions, Seward and Charles. Following is the income statement for the previous year: Seward Charles $779,000 $779,000 537,850 662,150 $241,150 $116,850 131,450 131,450 $109,700 $(14,600) Sales Variable Costs Contribution Margin Fixed Costs Profit Margin Of the total fixed costs, $180,000 are common fixed costs that are allocated equally between the divisions. What would Franklin's profit margin be if Charles were dropped? Multiple Choice $779,000 O $19,700 O $241,150 O $109,700
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