Use the Following Information to Answer the Following Questions

question 53

Multiple Choice

Use the following information to answer the following Questions
The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions:

In addition, the company incurred common fixed costs of $18,000.
-Which of the following amounts should be used to evaluate whether Restin, Inc., should continue to invest company resources in the Los Angeles division?

• A) $4,000.
• B) $8,000.
• C) $10,000.
• D) $25,000.
• E) $90,000.

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Definitions:

Sales Revenue

The total amount of money generated from the sale of goods or services by a company before any expenses are subtracted.

Accounts Receivable

Amounts owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Direct Method

A financial accounting method that allocates service department costs directly to producing departments without intermediate allocations.

Sales Revenue

The overall sum of money made from selling products or services before deducting any costs.