Marian Corporation Has Two Separate Divisions That Operate as Profit

question 101

Multiple Choice

Marian Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year: The Black Division occupies 20,000 square feet in the plant. The Navy 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. Compute departmental income for the Black and Navy Divisions, respectively.

• A) $52,000; $163,000.
• B) $172,000; $352,000.
• C) $72,000; $163,000.
• D) $72,000; $193,000.
• E) $100,000; $241,000.

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Definitions:

Discount Rate

An interest rate used by central banks to lend money to commercial banks, intended to influence the broader economy.

Initial Investment

The initial amount of money or capital put into an investment project or venture.

Operating Cash Flow

The amount of money generated by a company's regular business operations, indicating its ability to pay bills, repay debts, and reinvest in its business.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the decline in value over time.