Exhibit 11-1
Ashville Company Has Two Divisions - Bikes and Trikes

Exhibit 11-1
Ashville Company has two divisions - Bikes and Trikes.
$\begin{array}{c}\text { Ashville Company}\\\text { Segmented Income Statements}\\\text { For the Current Fiscal Year Ended December 31}\\\\\begin{array}{lrr}&\text { Bikes Division } & \text { Trikes Division }\\\text { Sales } & \$ 2,400,000 & \$ 1,000,000 \\\text { Cost of goods sold } & 1,400,000 & 530,000 \\ \text { Gross margin } & 1,000,000 & 470,000 \\\text { Allocated overhead (from corporate) } & 270,000 & 170,000 \\\text { Selling and administrative expenses } & 190,000 & 140,000 \\\text { Operating income } & 540,000 & 160,000 \\\text { Income tax expense (40\%) } & \mathbf{2 1 6 , 0 0 0} & \underline{64,000} \\\text { Net income } & \$ 324,000 & \$ 96,000\end{array}\end{array}$
-Refer to Exhibit 11-1.Using the segmented income statements,what is the profit margin ratio for the Bikes Division (to the nearest tenth of a percent) ?

A) 13.5
B) 41.7%
C) 22.5%
D) 58.3%
E) None of the answer choices is correct.