Determine the divisional income from operations for the Northeast and Pacific di

ID: 2504188 • Letter: D

Question

Determine the divisional income from operations for the Northeast and Pacific divisions.

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Determine the divisional income from operations for the Northeast and Pacific divisions.

Ohno Company Divisional Income from Operations Northeast Division Pacific Division Correct 6 $ Correct 7 $ Correct 8 Correct 9 Correct 10 Correct 11 Correct 12 $ Correct 13 $ Correct 14 Correct 15 Correct 16 Correct 17 Correct 18 $ Correct 19 $ Correct 20 Correct 21 Correct 22 Correct 23 Income from operations $ Correct 25 $ Correct 26

Explanation / Answer

STATEMENT SHOWING DIVISIONAL INCOME FROM OPERATIONS

PARTICULARS

NORTHEAST DIVISION

PACIFIC DIVISION

SALES

825000

860000

LESS:- COST OF GOODS SOLD

(422000)

(470000)

GROSS PROFIT

403000

390000

LESS:- SELLING EXPENSES

(165000)

(180000)

LESS:- EXPENSES OF The centralized employee Travel Department (i.e. TRAVEL SEVICES EXPENSE)

(87500)

(122500)

DIVISIONAL INCOME FROM OPERATIONS

150500

87500

WORKING NOTE:-

TRAVEL SERVICES TO BE CHARGED IN EACH DIVISION:-

Northeast Division:

TRAVEL RESERVATIONS FOR NORTEAST DIVISION/TOTAL RESERVATION FOR THE PERIOD * TOTAL EXPENSES

= (1250/3000)*210000

= $87500

Pacific Division:-

TRAVEL RESERVATIONS FOR PACIFIC DIVISION/TOTAL RESERVATION FOR THE PERIOD * TOTAL EXPENSES

= (1750/3000)*210000

= $122500