Textbook Problem

The Accounts Payable Department has expenses of $600,000 and makes 150,000 payments to the various vendors who provide products and services to the divisions. Division A has operating income of $900,000 before service department charges and makes 60,000 payments to vendors. If the Accounts Payable Department is treated as a service department, what is Division A’s operating income? A. $300,000
B. $900,000
C. $660,000
D. $540,000