Business: Trevor Company discloses supplementary operating segment information for its three reportable segments. Data for 20X8 are available as follows: Segment A Segment B Segment C Sales $500,000 $300,000 $200,000 Traceable operating expenses 250,000 120,000 90,000 Allocable costs for the year was $180,000. Allocable costs are assigned based on the ratio of a segment s income before allocable costs to total income before allocable costs. The 20X8 operating profit for Segment B was:. A) $180,000. B) $120,000.

Trevor Company discloses supplementary operating

aurelio1121

31.01.2022

The correct answer is B.

Explanation:

Giving the following information:

Segment A Segment B Segment C

Sales $500,000 $300,000 $200,000

Traceable operating expenses 250,000 120,000 90,000

Profit= 250,000 180,000 110,000 = 540,000

Allocable costs for the year was $180,000.

First, we need to allocate costs to Segment B:

Segment B= 180,000/540,000= 0.33

Allocate= 0.33*180,000= 60,000

Now, we can calculate the profit:

Segment B profit= 180,000 - 60,000= 120,000

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