Question

In: Accounting

Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable. Following is...

Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable. Following is the income statement for the previous year:

Granite Lime Nina Total
Sales $ 513,000 $ 273,000 $ 226,000 $ 1,012,000
Variable Costs 186,000 124,200 100,200 410,400
Contribution Margin 327,000 148,800 125,800 601,600
Fixed Costs (allocated) 270,000 164,250 122,750 557,000
Profit Margin $ 57,000 $ (15,450 ) $ 3,050 $ 44,600


a. 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?

Solutions

Expert Solution


Related Solutions

Question 1: Make or buy Note, the fixed costs are unavoidable. An outside supplier has offered...
Question 1: Make or buy Note, the fixed costs are unavoidable. An outside supplier has offered to sell Coleman Company the grills at $22 per unit.Coleman Company manufactures the grills for high end outdoor camping stoves and produces 18,000 units per year. The grills, used in a few different products that Coleman Company produces has the following information: Per Unit Direct Materials $8.00 Direct Labour 5.00 Variable Overhead 7.00 Fixed Overhead 6.00 Unit Cost $26 a) Complete the make or...
A geologist has collected 14 specimens of basaltic rock and 14 specimens of granite. The geologist...
A geologist has collected 14 specimens of basaltic rock and 14 specimens of granite. The geologist instructs a laboratory assistant to randomly select 23 of the specimens for analysis. (a) What is the pmf of the number of granite specimens selected for analysis? (Round your probabilities to four decimal places.) x                                           p(x)                                               (b) What is the probability that all specimens of one of the two types of rock...
The 20162016 income statement and comparative balance sheet of Granite RockGranite Rock?, Inc.? follow: LOADING... ?(Click...
The 20162016 income statement and comparative balance sheet of Granite RockGranite Rock?, Inc.? follow: LOADING... ?(Click the icon to view the income? statement.) LOADING... ?(Click the icon to view the comparative balance? sheet.)                                          ?Additionally, Granite RockGranite Rock purchased land of $ 19 comma 600$19,600 by financing it? 100% with? long-term notes payable during 20162016. During the? year, there were no sales of? land, no retirements of? stock, and no treasury stock transactions. A plant asset was disposed of for? $0....
Wilson Inc. has three divisions, Alpha, Beta and Gamma. Following is the income statement for the...
Wilson Inc. has three divisions, Alpha, Beta and Gamma. Following is the income statement for the previous year:    Alpha Beta Gamma Total Sales $ 1,000,000 $ 575,000 $ 425,000 $ 2,000,000 Variable Costs 400,000 345,000 300,000 1,045,000 Contribution Margin 600,000 230,000 125,000 955,000 Fixed Costs 375,000 215,625 159,375 750,000 Profit Margin 225,000 14,375 (34,375 ) 205,000 Of the fixed costs, $300,000 is for corporate costs and is allocated equally to the three divisions. How much does Gamma Division have in...
Milwaukee, Inc. has three divisions: Bud, Wise, and Er.
Milwaukee, Inc. has three divisions: Bud, Wise, and Er. The results of May, 2013 are presented belowAll of the allocated costs will continue even if a division is discontinued. Milwaukee allocates indirect fixed costs based on the number of units to be sold. Since the Wise division has a net loss, Milwaukee feels that it should be discontinued. Milwaukee feels if the division is closed, that sales at the Bud division will increase by 12%, and that sales at the...
Comment on the following statement, “Simplification of all costs into only fixed and variable costs distort...
Comment on the following statement, “Simplification of all costs into only fixed and variable costs distort the actual cost behavior pattern of a firm. Yet businesses rely on this method of cost classification.”
Malibu, Inc., which has fixed costs of $2,978,000, sells three products whose sales price, variable cost...
Malibu, Inc., which has fixed costs of $2,978,000, sells three products whose sales price, variable cost per unit, and percentage of sales units are presented in the table below. Product A Product B Product C Sales Price $ 8.00 $ 13.00 $ 30.00 Variable Cost $ 5.00 $ 5.00 $ 16.00 Product Mix 60 % 20 % 20 % a. What is the weighted average unit contribution margin? (Round your answer to 2 decimal places.)    b. At the break-even...
Explain the following terms and give at least one example for each. 6- Unavoidable costs 7-...
Explain the following terms and give at least one example for each. 6- Unavoidable costs 7- Common costs 8- Book Value 9- Sunk Costs 10- Inventory Turnover
Altoona Technologies, Inc. has three divisions. Altoona has a desired rate of return of 11.0 percent....
Altoona Technologies, Inc. has three divisions. Altoona has a desired rate of return of 11.0 percent. The operating assets and income for each division are as follows: Divisions Operating Assets Operating Income Printer $ 740,000 $ 115,440 Copier 1,010,000 101,000 Fax 560,000 72,800 Total $ 2,310,000 $ 289,240 Altoona headquarters has $140,000 of additional cash to invest in one of its divisions. The division managers have identified investment opportunities that are expected to yield the following ROIs: Expected ROIs for...
Franklin Technologies, Inc. has three divisions. Franklin has a desired rate of return of 12.0 percent....
Franklin Technologies, Inc. has three divisions. Franklin has a desired rate of return of 12.0 percent. The operating assets and income for each division are as follows:       Divisions Operating Assets Operating Income Printer $ 610,000 $ 102,480 Copier 880,000 99,440 Fax 430,000 61,060 Total $ 1,920,000 $ 262,980 Franklin headquarters has $127,000 of additional cash to invest in one of its divisions. The division managers have identified investment opportunities that are expected to yield the following ROIs: Expected ROIs...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT