Reference: 22_02
Jamesway Corporation Has Two Separate Divisions That Operate

question 79

Short Answer

Reference: 22_02
Jamesway Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year:
$$\begin{array} { l c c c } & \text { White } & & \text { Grey } \\& \text { Division } & & \text { Division } \\ \text { Sales (nat) } & \$ 200,000 & & \$ 400,000 \\\text { Salary expense } & 28,000 & & 48,000 \\\text { Cost of goods sold } & 100,000 & & 159,000\end{array}$$ The White Division occupies 20,000 square feet in the plant. The Grey Division occupies 30,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $50,000.
-Gross profit for the White and Grey Divisions is:
$\begin{array}{lll} &&\text {White}&&\text {Grey}\end{array}$
A. $\begin{array}{lll}& \$ 72,000 & \$ 193,000 \\\end{array}$
B. $\begin{array}{lll} & \$ 172,000 & \$ 352,000 \\\end{array}$
C. $\begin{array}{lll}& \$ 100,000 & \$ 241,000 \\\end{array}$
D. $\begin{array}{lll} & \$ 52,000 & \$ 163,000 \\\end{array}$
E. $\begin{array}{lll} & \$ 72,000 & \$ 163,000\end{array}$

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