Operating income for Division L is $250,000, total support department allocations are $400,000, and operating expenses are $2,750,000. The revenues for Division L are
A)$650,000
B)$3,000,000
C)$3,400,000
D)$2,750,000

Question

Quizplus · Accepted Answer

Operating income is calculated as Revenues - Operating Expenses - Support Department Allocations. Rearranging gives Revenues = Operating Income + Operating Expenses + Support Department Allocations = $250,000 + $2,750,000 + $400,000 = $3,400,000.

Operating Income for Division L Is $250,000, Total Support Department