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 $45,500 $31,400 Direct operating expenses 27,800 22,800 Sales 91,800 66,500 Interest expense $2,800 General overhead 18,400 Income tax 4,500 The income from operations for the Rails Division is a.$46,300 b.$91,800 c.$18,500 d.$64,000

Answer 1

Answer: $18500

Explanation:

The income from operations for the rail divisions will be calculated thus:

For the rail division,

Sales = $91800

Cost of goods sold = $45500

Direct operating expense = $27800

Income from operations:

= $91800 - $45500 - $27800

= $18500