Marian Corporation has two separate divisions that operate as profit centers. Th

Question

Marian Corporation has two separate divisions that operate as profit centers.

  

The following information is available for the most recent year:   The Black Division occupies 28,000 square feet in the plant. The Navy Division occupies 42,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $70,000. Compute departmental income for the Black and Navy Divisions, respectively. (Do not round your intermediate computations)

$150,000; $129,000.

$530,000; $169,000.

$482,000; $87,000.

$150,000; $107,000.

$680,000; $280,000.

Black Division Navy Division   Sales (net) $700,000 $320,000   Salary expense 20,000 40,000   Cost of goods sold 170,000 151,000

Explanation / Answer

The correct option is: $ 482,000; $ 87,000

Black Division Navy Division Sales $ 700,000 $ 320,000 Cost of goods sold $ 170,000 $ 151,000 Gross Profit $ 530,000 $ 169,000 Salary expense $ 20,000 $ 40,000 Rent expense $ 28,000 $ 42,000 Departmental income $ 482,000 $ 87,000

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