Division T reported income from operations of $900,000 and total service department charges of $575,000.Therefore:
A)net income was $325,000.
B)the gross profit margin was $325,000.
C)income from operations before service department charges was $1,475,000.
D)consolidated net income was $325,000.

Question

Quizplus · Accepted Answer

Income from operations before service department charges can be calculated by adding service department charges to income from operations. Therefore, income from operations before service department charges was $1,475,000 ($900,000 + $575,000). None of the other answer choices are correct based on the information given.

Division T Reported Income from Operations of $900,000 and Total