Question: ABC Construction C 0 . has two divisions that are run as separate profit centers, a general contracting group and a group that self -
ABC Construction C has two divisions that are run as separate profit centers, a general contracting group and a group that selfperforms drywall and interior finishes. The GC group historically has two classes of customers: industrial clients and commercial clients. The industrial work accounts for of the GC group's sales with an average contribution margin of and the commercial group, comprises the balance of the GC group revenue, averages The selfperform group averages The GC group has budgeted fixed overhead at $ for the coming year while the fixed overhead budget for the selfperform group is at $ The company has budgeted its common fixed overhead, not allocable to either division, at $ Each division is expected to contribute equally to cover this overhead. The company's executive management has advised each division manager that it expects a net profit before income taxes of not less than of revenues. Please determine the targeted revenue for each division.
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