# Income from operations for profit center Using the data for Croce Company from Practice Exercise 24-2A along with the following data, determine the divisional income from operations for the South and West divisions: South Division West Division Sales $2,600,000$2,420,000 Cost of goods sold 1,352,000 1,379,400 Selling expenses 520,000 484,000

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

#### Solutions

Chapter
Section
Chapter 24, Problem 24.3APE
Textbook Problem

## Income from operations for profit center Using the data for Croce Company from Practice Exercise 24-2A along with the following data, determine the divisional income from operations for the South and West divisions:   South Division West Division Sales $2,600,000$2,420,000 Cost of goods sold 1,352,000 1,379,400 Selling expenses 520,000 484,000

Expert Solution
To determine

Income from operations: Revenue generated mainly from business operations, after the operating expenses are being paid, is referred to as income from operations.

To determine: The income from operations for S Division and W Division

### Explanation of Solution

Compute divisional income from operations for S Division and W Division.

 Company C Divisional Income Statements S Division W Division Sales $2,600,000$2,420,000 Cost of goods sold 1,352,000 1,379,400 Gross profit 1,248,000 1,040,600 Selling expenses 520,000 484,000 Income from operations before service department charges 728,000 556,600 Service department charges 412,680 311,320 Income from operations $315,320$245,280

Table (1)

Working Notes:

Determine the service charges to be charged for travel department of S Division.

Travel service charges = {Number of billed reservations of S Division× Rate per billed reservation}={Number of billed reservations of S Division ×

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