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Market Inc. has two divisions, Talbot and Heather. Following is the income statement for the past month
Talbot
Sales 280,000
Variable Costs 168,000
Contribution Margin 112,000
Fixed Cost (allocated) 112,500
Profit Margin (500)
Heather
Sales 168,000
Variable Costs 67,000
Contribution Margin 101,000
Fixed Cost (allocated) 67,500
Profit Margin 33,500
Problem 1: What would Market's profit margin be if the Talbot division was dropped and all fixed costs are unavoidable
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