Tuttle Company discloses supplementary operating segment information for its thr

Question

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

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

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

Explanation / Answer

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

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