Rock Incorporated has three divisions, Granite, Lime and Nina. All fixed costs are common and unavoidable. Following is the income statement for the previous year: Sales revenue Variable costs Contribution/segment margin Common fixed costs (allocated) Net operating income (loss) Required: Granite $ 510,000 176,000 $ 334,000 258,000 $ 76,000 Line $ 273,500 124,700 $ 148,800 154,250 $ (5,450) a. What would Rock's income (loss) be if the Lime Division were dropped? b. What would Rock's income (loss) be if the Nina Division were dropped? Nina $ 230,000 100,500 $ 129,500 108,750 $ 20,750 Total $ 1,013,500 401, 200 $ 612,300 521,000 $ 91,300
Rock Incorporated has three divisions, Granite, Lime and Nina. All fixed costs are common and unavoidable. Following is the income statement for the previous year: Sales revenue Variable costs Contribution/segment margin Common fixed costs (allocated) Net operating income (loss) Required: Granite $ 510,000 176,000 $ 334,000 258,000 $ 76,000 Line $ 273,500 124,700 $ 148,800 154,250 $ (5,450) a. What would Rock's income (loss) be if the Lime Division were dropped? b. What would Rock's income (loss) be if the Nina Division were dropped? Nina $ 230,000 100,500 $ 129,500 108,750 $ 20,750 Total $ 1,013,500 401, 200 $ 612,300 521,000 $ 91,300
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Answer required a and b
Transcribed Image Text:Rock Incorporated has three divisions, Granite, Lime and Nina. All fixed costs are common and unavoidable. Following is the income
statement for the previous year:
Sales revenue
Variable costs
Contribution/segment margin
Common fixed costs (allocated)
Net operating income (loss)
Required:
Granite
$ 510,000
176,000
$ 334,000
258,000
$ 76,000
a. What would Rock's income (loss) be if the Lime Division were dropped?
b. What would Rock's income (loss) be if the Nina Division were dropped?
Required A Required B
Complete this question by entering your answers in the tabs below.
What would Rock's income (loss) be if the Lime Division were dropped?
Profit
Loss
Lime
$ 273,500
124,700
$ 148,800
154,250
$ (5,450)
Required A
Required B >
Nina
$ 230,000
100,500
$ 129,500
108,750
$ 20,750
Total
$ 1,013,500
401, 200
$ 612,300
521,000
$ 91,300
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