Marian Corporation has two separate divisions that operate as profit centers. The following information is available...

Marian Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year:

	Black Division			Navy Division
Sales (net)		$	400,000	$	350,000
Salary expense			23,000		43,000
Cost of goods sold			140,000		154,000

The Black Division occupies 22,000 square feet in the plant. The Navy Division occupies 33,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $55,000. Compute departmental income for the Black and Navy Divisions, respectively. (Do not round your intermediate computations)

Multiple Choice

$215,000; $120,000.
$377,000; $307,000.
$117,000; $128,000.
$117,000; $153,000.
$260,000; $196,000.

Solutions

Expert Solution

Correct Option A i.e. $215,000; $120,000.


	Black Division	Navy Division
Sales (net)	400,000	350,000
Less: Salary expense	23,000	43,000
Less: Cost of goods sold	140,000	154,000
Less: Rent Expense	22,000	33,000
	(22000/55000 sq feet * 22000 sq feet)	(33000/55000 sq feet * 33000 sq feet)

Departmental Income	215,000	120,000

ekkarill92 answered 1 year ago

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