Reference no: EM132528035
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) $1,000,000 $370,000
Salary expense 25,000 45,000
Cost of goods sold 120,000 156,000
Question 1: The Black Division occupies 17,000 square feet in the plant. The Navy Division occupies 27,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $47,000. Compute gross profit for the Black and Navy Divisions, respectively.
Option 1: $975,000; $325,000.
Option 2: $95,000; $169,000.
Option 3: $95,000; $142,000.
Option 4: $880,000; $214,000.
Option 5: $78,000; $142,000.
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