Question

Market Inc. has two divisions, Talbot and Heather. Following is the income statement for the past month: Talbot Heather Total Sales$280,000 $168,000 $448,000 Variable Costs 168,000 67,000 235,000 Contribution Margin 112,000 101,000 213,000 Fixed Costs (allocated) 112,500 67,500 180,000 Profit Margin$(500) $33,500 $33,000 What would Market's profit margin be if the Talbot division was dropped and all fixed costs are unavoidable

Answer 1

Answer:

$(79,000)

Explanation:

Calculation to determine What would Market's profit margin be if the Talbot division was dropped and all fixed costs are unavoidable

Using this formula

Market's profit margin =Contribution margin - Fixed costs

Let plug in the formula

Market's profit margin=$101,000-$180,000

Market's profit margin=$(79,000)

Therefore What would Market's profit margin be if the Talbot division was dropped and all fixed costs are unavoidable is $(79,000)