Answer:
Black Division - $484,000
Navy Division - $90,000
Explanation:
Other information required
Black Division Navy Division
Sales (net) $700,000 $320,000
Salary expense $20,000 $40,000
Cost of goods sold $170,000 $151,000
The income is the sales net all expenses. The rental expense will be allocated to each department based on the square footage occupied.
As such, rental expense for
Black Division
= 26000/(26000 + 39000) * $65,000
= $26000
Navy division
= 39000/(26000 + 39000) * $65,000
= $39000
Hence the income for
Black Division
= $700,000 - $20,000 - $170,000 - $26,000
= $484,000
Navy division
= $320,000 - $40,000 - $151,000 - $39,000
= $90,000
