Question

The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:

	Rails    Division	Locomotive    Division	Corporate    Total
Cost of goods sold	$45,100	$29,600
Direct operating expenses	27,500	21,700
Sales	93,500	65,700
Interest expense			$2,800
General overhead			18,100
Income tax			4,500

The gross profit for the Rails Division is

a.$66,000

b.$20,900

c.$48,400

d.$93,500

Answer 1

The answer is B- 20,900

Sales	93,500
Cost of goods sold	45,100
Direct operating expenses	27,500
Gross Profit	20,900

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