Compute operating income for the West Division

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Question - Fallow Corporation has two separate profit centers. The following information is available for the most recent year:

 

West Division

East Division

Sales (net)

$350,000

$500,000

Salary expense

41,000

55,000

Cost of goods sold

125,000

235,000

The West Division occupies 8,750 square feet in the plant. The East Division occupies 5,250 square feet. Rent, which was $ 70,000 for the year, is an indirect expense and is allocated based on square footage. Compute operating income for the West Division.

a. $183,750.

b. $140,000.

c. $139,000.

d. $140,250.

e. $125,250.

Reference no: EM132532196

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