Question

Marian Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year:

	Black Division					Navy Division
Sales (net)		$	300,000			$	410,000
Salary Expense			29,000				49,000
Cost of goods sold			110,000				160,000

The Black Division occupies 21,000 square feet in the plant. The Navy Division occupies 31,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $51,000. Compute gross profit for the Black and Navy Divisions, respectively.

Multiple Choice

a. $190,000; $250,000.

b. $271,000; $361,000.

c. $81,000; $201,000.

d. $81,000; $170,000.

e. $60,000; $170,000.

Answer 1