Pale Company Has Four Manufacturing Divisions, Each of Which Has

question 17

Multiple Choice

Pale Company has four manufacturing divisions, each of which has been determined to be a reportable segment. Common operating costs are appropriately allocated on the basis of each division's sales in relation to Pale's aggregate sales. Pale's Delta division accounted for 40% of Pale's total sales in 2017. For the year ended December 31, 2017, Delta had sales of $5,000,000 and traceable costs of $3,600,000. In 2017, Pale incurred operating costs of $350,000 that were not directly traceable to any of the divisions. In addition, Pale incurred interest expense of $360,000 in 2017. In reporting supplementary segment information, how much should be shown as Delta's operating profit for 2017?

• A) $1,400,000
• B) $1,256,000
• C) $1,260,000
• D) $1,116,000

---

Definitions:

Photograph

An image created by light falling on a photosensitive surface, usually photographic film or an electronic image sensor, such as a CCD or a CMOS chip.

Bait And Switch

A deceptive marketing strategy where a seller advertises a product at a low price to attract customers, then persuades them to buy a more expensive item.

Implied Claims

Statements or assertions that are suggested or understood without being directly stated.

Behavioral Targeting

A marketing strategy that uses individuals' behavior and preferences to tailor advertisements and content.