Question

Use this information for Train Corporation to answer the question that follow. 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 $46,100 $29,500 Direct operating expenses 26,900 22,100 Sales 97,300 65,500 Interest expense $2,500 General overhead 19,200 Income tax 4,300
The gross profit for the Locomotive Division is:

Answer 1

Answer:

Gross profit= $36,000

Explanation:

Giving the following information:

Cost of goods sold:

Rails Division= 46,100

Locomotive Division= 29,500

Sales:

Rails Division= 97,300

Locomotive Division= 65,500

To calculate the gross profit, we need to use the following formula:

Gross profit= Sales - cost of goods sold

Gross profit (Locomotive)= 65,500 - 29,500= $36,000