Clay Inc. has two divisions, Myrtle and Laurel. Following is the income statement for the...
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Accounting
Clay Inc. has two divisions, Myrtle and Laurel. Following is the income statement for the previous year: Myrtle Laurel Total Sales $ 560,400 $ 336,500 $ 896,900 Variable Costs 176,500 174,400 350,900 Contribution Margin 383,900 162,100 546,000 Fixed Costs (allocated) 284,675 171,125 455,800 Profit Margin $ 99,225 $ (9,025 ) $ 90,200 What would Clays profit margin be if the Laurel division was dropped and all fixed costs are unavoidable? $90,200 profit $71,900 loss $383,900 profit $99,225 profit
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