Income from operations of the Commercial Aviation Division is $3,300,000.If income from operations before service department charges is $3,900,000:
A)operating expenses are $600,000.
B)total service department charges are $600,000.
C)noncontrollable charges are $7,200,000.
D)direct manufacturing charges are $3,900,000.

Question

Quizplus · Accepted Answer

Service department charges are expenses that are allocated to different divisions or departments within a company for services that are provided by other departments. In this case, if income from operations before service department charges is $3,900,000 and income from operations of the Commercial Aviation Division is $3,300,000, it means that the Commercial Aviation Division incurred $600,000 in service department charges, which are included in the $3,900,000 figure. Therefore, total service department charges are $600,000.

Income from Operations of the Commercial Aviation Division Is $3,300,000