What is the profit of cwb inc

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Reference no: EM133131318

Question - CWB Inc. has two divisions, Almond and Oak. If the Oak division is eliminated, the common fixed costs are still not avoidable but the sales of the Almond division would increase by 10%. Following is the income statement for the previous year:

 

Almond

Oak

Total

Sales

$499,000?

$270,500?

$769,500

Variable Costs

184,000?

124,800?

308,800

Contribution Margin

315,000?

145,700?

460,700

Fixed Costs

273,000?

151,250?

424,250

Profit

$42,000?

$(5,550)

$36,450

Out of the total fixed costs $ 424,250, $ 80,000 is for the common fixed costs and is allocated equally to the two divisions.

Required - What is the profit of CWB Inc. if the Oak division is dropped?

Reference no: EM133131318

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