What amount should be disclosed as Delta profit

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Problem - Lotad Company has four manufacturing divisions, each of which has been determined to be a reportable segment. Common costs are appropriately allocated on the basis of each division's sales in relation to Lotad's aggregate sales. Lotad's Delta division accounted for 40% of Lotad's total sales in the current year.

For the current year, Delta division had sales of P8,000,000 and traceable costs of P4,800,000. In addition, the Delta division incurred interest expense of P680,000. In the current year, Lotad incurred costs of P800,000 that were not directly traceable to any of the divisions.

It is an entity policy that interest expenses is included in the measure of profit or loss that is reviewed by the chief operating decision maker.

What amount should be disclosed as Delta's profit for the current year?

Reference no: EM132943960

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