Question:97 Eastern Merchants shows the following information for its two divisions for year 1: Eastern Western Sales revenue Cost of sales $ 12,70,000 $ 38,70,000 $ 8,04,500 $19,35,000 Allocated corporate overhead $ 76,200 $2,32,200 $1,65,500 $ 11,07,000 Other general and administration a) Compute divisional operating income for the two divisions. b) How well have these divisions performed?

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter14: Decentralized Operations
Section: Chapter Questions
Problem 14.5.1P
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Question:97
Eastern Merchants shows the following information for its two divisions
for year 1:
Eastern
Western
Sales revenue
Cost of sales
$ 12,70,000
$ 38,70,000
$ 8,04,500
$19,35,000
Allocated corporate overhead
$ 76,200
$2,32,200
$1,65,500
$ 11,07,000
Other general and administration
a) Compute divisional operating income for the two divisions.
b) How well have these divisions performed?
Transcribed Image Text:Question:97 Eastern Merchants shows the following information for its two divisions for year 1: Eastern Western Sales revenue Cost of sales $ 12,70,000 $ 38,70,000 $ 8,04,500 $19,35,000 Allocated corporate overhead $ 76,200 $2,32,200 $1,65,500 $ 11,07,000 Other general and administration a) Compute divisional operating income for the two divisions. b) How well have these divisions performed?
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