Tres Company has three lines of business, each of which was determined to be reportable segment. Sales aggregated P7,500,000 in the current year, of which Segment One contributed 40%. Traceable costs were P1,750,000

College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter25: Departmental Accounting
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Tres Company has three lines of business, each of which was determined to be reportable segment. Sales aggregated P7,500,000 in the current year, of which Segment One contributed 40%. Traceable costs were P1,750,000 for Segment One out of a total of P5,000,000 for the entity as a whole. The entity allocates common costs of P1,500,000 based on the ratio of a segment's income before common costs to the total income before common costs. What amount should be reported as operating profit for Segment One?
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