Jamesway Corporation has two separate divisions that operate as profit centers.The following information is available for the most recent year:
$$\begin{array} { l r r r }
& \text { White Division } & & \text { Grey Division } \
\text { sales (net) } & \$ 200,000 & & \$ 400,000 \
\text { salary expense } & 28,000 & & 48,000 \
\text { Cost of goods sold ...... } & 100,000 & & 159,000
\end{array}$$ The White Division occupies 20,000 square feet in the plant.The Grey Division occupies 30,000 square feet.Rent is an indirect expense and is allocated based on square footage.Rent expense for the year was $50,000.Compute departmental income for the White and Grey Divisions,respectively.
A)$52,000; $163,000.
B)$172,000; $352,000.
C)$72,000; $163,000.
D)$72,000; $193,000.
E)$100,000; $241,000.

Question

Jamesway Corporation has two separate divisions that operate as profit centers.The following information is available for the most recent year:
$$\begin{array} { l r r r } 
& \text { White Division } & & \text { Grey Division } \
\text { sales (net) } & \$ 200,000 & & \$ 400,000 \
\text { salary expense } & 28,000 & & 48,000 \
\text { Cost of goods sold ...... } & 100,000 & & 159,000
\end{array}$$ The White Division occupies 20,000 square feet in the plant.The Grey Division occupies 30,000 square feet.Rent is an indirect expense and is allocated based on square footage.Rent expense for the year was $50,000.Compute departmental income for the White and Grey Divisions,respectively.
A)$52,000; $163,000.
B)$172,000; $352,000.
C)$72,000; $163,000.
D)$72,000; $193,000.
E)$100,000; $241,000.

Quizplus · Accepted Answer

The correct answer is A because the departmental income for the White Division is $52,000 and the departmental income for the Grey Division is $163,000.

Jamesway Corporation Has Two Separate Divisions That Operate as Profit