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Fallow Corporation has two separate profit centers. The following information is available for the most recent year: West Division East Division Sales (net) $ 300,000

Fallow Corporation has two separate profit centers. The following information is available for the most recent year:

West Division East Division
Sales (net) $ 300,000 $ 450,000
Salary expense 36,000 50,000
Cost of goods sold 110,000 215,000

The West Division occupies 7,500 square feet in the plant. The East Division occupies 4,500 square feet. Rent, which was $ 60,000 for the year, is an indirect expense and is allocated based on square footage. Compute operating income for the West Division.

Multiple Choice

  • $162,500.

  • $125,000.

  • $124,000.

  • $116,500.

  • $101,500.

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