Question

PLEASE ANSWER ASAP

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	$45,400	$28,400
Direct operating expenses	26,600	22,800
Sales	90,300	68,600
Interest expense			$2,400
General overhead			19,900
Income tax			4,500

The income from operations for the Locomotive Division is

a.$40,200

b.$68,600

c.$45,800

d.$17,400

Answer 1

• Working

Working		Locomotive Division
A	Sales	$            68,600.00
B	Cost of Goods Sold	$            28,400.00
C = A - B	Gross Profits	$            40,200.00
D	Direct Operating Expense	$            22,800.00
E = C - D	Income from Operations	$            17,400.00

• Correct Answer = Option ‘D’ $ 17,400