The following data are taken from the management accounting reports of Dulcimer

Question

The following data are taken from the management accounting reports of Dulcimer Co.:

If an incentive bonus is paid to the manager who achieved the highest income from operations before service department charges, it follows that

a.Divisions B and C's managers divide the bonus

b.Division C's manager is given the bonus

c.Division B's manager is given the bonus

d.Division A's manager is given the bonus

Div. A Div. B Div. C Income from operations $1,900,000 $1,450,000 $1,450,000 Total service department charges 1,700,000 1,050,000 1,100,000

Explanation / Answer

Answer:- Division A’s manager is given the bonus (Option D).

Explanation:-Income from operations of division A before service department charges is $1900000 which is greater the division B & division C hence incentive bonus will be paid to the manager of division A.

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