Franklin,Inc

question 83

Multiple Choice

Franklin,Inc.has two divisions,Seward and Charles.Following is the income statement for the previous year: Of the total fixed costs,$300,000 are common fixed costs that are allocated equally between the divisions.What would Franklin's profit margin be if Charles were dropped?

• A)$60,000
• B)$80,000
• C)$100,000
• D)$230,000

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Definitions:

Risk

Potential loss from destruction or damage to goods, injury, or other eventuality.

Seller's Place

The physical or juridical location where the seller operates, often relevant in legal and commercial transactions.

Freedom of Contract

The principle that individuals have the liberty to freely enter into contracts and agree on terms without undue interference.

Caveat Emptor

Latin for "let the buyer beware," indicating that the buyer assumes the risk for the quality and condition of goods purchased unless protected by warranty.