Windmill Corp. has three manufacturing divisions, each of which has been Determined to be reportable segment. Common costs are appropriately allocated on the basis of each division’s sales in relation to Windmill’s aggregate sales. In the current year, Division 1 had sales of P6,000,000, which was 20%of Windmill’s total sales, and had traceable cost of P3,800,00. Windmill incurred operating cost of P1,000,000 that were not directly traceable to any of the divisions. In addition, Windmill incurred interest expense of P600,000. In reporting segment information, what amount should be shown as operating profit of Division 1 for the current year?
Windmill Corp. has three manufacturing divisions, each of which has been Determined to be reportable segment. Common costs are appropriately allocated on the basis of each division’s sales in relation to Windmill’s aggregate sales. In the current year, Division 1 had sales of P6,000,000, which was 20%of Windmill’s total sales, and had traceable cost of P3,800,00. Windmill incurred operating cost of P1,000,000 that were not directly traceable to any of the divisions. In addition, Windmill incurred interest expense of P600,000. In reporting segment information, what amount should be shown as operating profit of Division 1 for the current year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Windmill Corp. has three manufacturing divisions, each of which has been Determined to be reportable segment. Common costs are appropriately allocated on the basis of each division’s sales in relation to Windmill’s aggregate sales. In the current year, Division 1 had sales of P6,000,000, which was 20%of Windmill’s total sales, and had traceable cost of P3,800,00. Windmill incurred operating cost of P1,000,000 that were not directly traceable to any of the divisions. In addition, Windmill incurred interest expense of P600,000.
In reporting segment information, what amount should be shown as operating profit of Division 1 for the current year?
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