Division A reported income from operations of $975,000 and total service department charges of $675,000. As a result,
A) net income was $300,000
B) the gross profit margin was $300,000
C) income from operations before service department charges was $1,650,000
D) consolidated net income was $300,000

Question

Quizplus · Accepted Answer

Income from operations before service department charges is calculated by adding the service department charges back to the reported income from operations: $975,000 + $675,000 = $1,650,000.

Division a Reported Income from Operations of $975,000 and Total