Adrian Cursio & Associates is a consulting business that operates in a rented office in Melbourne CBD, offering t

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Adrian Cursio & Associates is a consulting business that operates in a rented office in Melbourne CBD, offering taxation, superannuation and insurance advice. The office has a main reception area (servicing all departments) with the remaining floor space allocated to the three departments.

The following information is provided for the three departments:

Divisional costs includes professional staff wages to directly providing advice and conduct consulting to clients. The common cost made up of reception wages and rent is totalled at $165,000. If the common cost is allocated by income, what is the profit (or loss) made by the Insurance division?

a.

$37,784.82

b.

$35,000

c.

$355,000

d.

$142,215.18

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