Division A reported operating income of $975,000 and total support department allocations of $675,000. As a result,
A)net income was $300,000
B)the gross profit was $300,000
C)operating income before support department allocations was $1,650,000
D)consolidated net income was $300,000

Question

Quizplus · Accepted Answer

Operating income before support department allocations is calculated by adding the support department allocations back to the reported operating income. Therefore, $975,000 + $675,000 = $1,650,000.

Division a Reported Operating Income of $975,000 and Total Support