Franklin, Inc. has two divisions, Seward and Charles. Following is the income statement for the previous year:
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Franklin, Inc. has two divisions, Seward and Charles. Following is the income statement for the previous year:
| Seward | Charles | ||||
Sales | $ | 937,800 | | $ | 625,200 | |
Variable Costs | | 609,320 | | | 562,680 | |
Contribution Margin | $ | 328,480 | | $ | 62,520 | |
Fixed Costs | | 159,300 | | | 159,300 | |
Profit Margin | $ | 169,180 | | $ | (96,780 | ) |
|
Of the total fixed costs, $310,000 are common fixed costs that are allocated equally between the divisions. What would Franklin's profit margin be if Charles were dropped?
Multiple Choice
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$937,800
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$169,180
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$14,180
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$328,480
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
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