Operating income of the Commercial Aviation Division is $3,300,000.If operating income before service department charges is $3,900,000:
A) operating expenses are $600,000.
B) total service department charges are $600,000.
C) noncontrollable charges are $7,200,000.
D) direct manufacturing charges are $3,900,000.

Question

Quizplus · Accepted Answer

Since the operating income before service department charges is greater than the operating income of the Commercial Aviation Division, the difference must be from the service department charges. Therefore, the total service department charges must be $600,000 (3,900,000 - 3,300,000).

Operating Income of the Commercial Aviation Division Is $3,300,000