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Question
Fallow Corporation has two separate profit centers. The following information is available for the most recent year:| West Division | East Division | ||
| Sales (net).................. | $200,000 | $350,000 | |
| Salary expense........... | 26,000 | 40,000 | |
| Cost of goods sold..... | 80,000 | 175,000 |
The West Division occupies 5,000 square feet in the plant. The East Division occupies 3,000 square feet. Rent, which was $40,000 for the year, is an indirect expense and is allocated based on square footage. Compute operating income for the West Division.
A.$120,000.
B.$95,000.
C.$94,000.
D.$69,000.
E.$54,000.
Answer
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