Lavandyr Company Has Two Divisions with the Following Segment Margins

question 24

Multiple Choice

Lavandyr Company has two divisions with the following segment margins for the current year: Northern, $300,000 and Southern, $500,000.Common expenses of the company are $75,000.What is Lavandyr Company's income?

• A) $360,000
• B) $725,000
• C) $215,000
• D) $420,000

---

Definitions:

Applied Overhead

An accounting method that allocates estimated overhead costs to specific jobs or production units based on a predetermined rate or formula.

Direct Labor

Wages or costs directly associated with workers who are involved in the production of goods or services.

Continuous Process

A manufacturing or production process that operates without interruption, typically in industries where the product is produced in a flow rather than discrete units.

Applied Overhead

The portion of manufacturing overhead costs allocated to individual units of production based on a predetermined rate.