Rose Limited and Petal Limited Formed a Joint Operation and Share

Rose Limited and Petal Limited formed a joint operation and share in the output of the joint operation 75:25. The joint operation paid a management fee of $250 000 to Rose Limited during the current period. The cost to Rose Limited of supplying the management service was $200 000. The amount of profit that Rose Limited will recognise in relation to the provision of the management fee to the joint operation is:

A) $50 000
B) $37 500
C) $12 500
D) $0

Correct Answer:

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