Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Hamilton, Inc
Hamilton, Inc. has two divisions, Parker and Blaine. Following Is the Income statement for the previous year.
Parker Blaine Sales $751,500 $751,500 Variable Costs 518,225 638,775 Contribution Margin $233,275 $112,725 Fixed Costs 152,800 152,800 Profit Margin $ 80,475 $(40,075)
Of the total fixed costs, $300,000 are common fixed costs that are allocated equally between the divisions. What would Hamilton's profit margin be if Blaine were dropped?
Multiple Choice $40,400 S(5.600)
Expert Solution
So, the correct option is 3rd "$69,525".
Workings:
| Income Statement | |||||
| Total Company | Parker | Blaine | |||
| Amount | Amount | Amount | |||
| Sales | $751,500 | $751,500 | |||
| Variable cost | $518,225 | $518,225 | |||
| Contribution margin | $233,275 | $233,275 | $0 | ||
| Traceable fixed cost ((152800+152800)-300000)/2) | $2,800 | $2,800 | |||
| Market segment margin | $230,475 | $230,475 | $0 | ||
| Common fixed expenses not traceable to market | $300,000 | ||||
| Office segment margin | ($69,525) | ||||
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
