Operating Income for Division H Is $220,000, and Operating Income

question 191

Multiple Choice

Operating income for Division H is $220,000, and operating income before support department allocations is $975,000. As a result,

• A)total operating expenses are $565,000
• B)total manufacturing expenses are $565,000
• C)direct materials, direct labor, and factory overhead total $565,000
• D)total support department allocations are $755,000

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Definitions:

Accruals

Accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash transaction takes place.

Unrecorded Expense

An expense that has been incurred but not yet documented or reported in the accounting records.

Unrecorded Revenue

Revenue that has been earned but has not yet been documented in the accounting records.

Revenues

The income generated from normal business operations, often from the sale of goods and services to customers.