Question

Tuttle Company discloses supplementary operating segment information for its three reportable segments. Data for 20X3 are available as follows:

	Segment A				Segment B				Segment C
Sales	$	500,000			$	300,000			$	200,000
Traceable operating expenses		250,000				120,000				90,000

Additional 20X3 expenses include indirect operating expenses of $100,000. Appropriately selected common indirect operating expenses are allocated to segments based on the ratio of each segment's sales to total sales. The 20X3 operating profit for Segment A was:

Multiple Choice

$200,000

$180,000

$250,000

$150,000

Answer 1

		Tuttle Company
		Segment A	Segment B	Segment C
	Sales(A)	$                 5,00,000.00	$             3,00,000.00	$               2,00,000.00
	Traceable Expenses(B)	$                 2,50,000.00	$             1,20,000.00	$                   90,000.00
	Indirect Operating Expenses(C )	$                    50,000.00	$                 30,000.00	$                   20,000.00
	Operating Profit(D)=(A)-(B)-(C )	$                 2,00,000.00	$             1,50,000.00	$                   90,000.00
	Working
	Indirect Operating Expenses in Percentage of Sales
		Segment A	Segment B	Segment C
	Ratio	($500000/$1000000)	($300000/$1000000)	($200000/$1000000)
	Ratio=	0.5	0.3	0.2
	Indirect Operating Expenses in Percentage of Sales	($100000*.50)	($100000*.30)	($100000*.20)
Ans	The Operating Profit of Segment A was	$200000