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Use the Table Below to Answer the Question A) Catering Makes a Profit of 65,000 and Cleaning Makes

Question 1

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Use the table below to answer the question. All numbers in local currency. Assume indirect costs are allocated according to the value of equipment in each department. Cleaning has 75,000 worth of equipment and Catering has 300,000. That would mean:  Cleaning  Catering  Total  Sales Revenue 195,000455,000650,000 Direct costs 165,000300,000465,000 Contribution  Indirect Costs 105,000 Operating Income \begin{array} { | l | l | l | l | } \hline & \text { Cleaning } & \text { Catering } & \text { Total } \\\hline \text { Sales Revenue } & 195,000 & 455,000 & 650,000 \\\hline \text { Direct costs } & 165,000 & 300,000 & 465,000 \\\hline \text { Contribution } & & & \\\hline \text { Indirect Costs } & & & 105,000 \\\hline \text { Operating Income } & & & \\\hline\end{array}


A) Catering makes a profit of 65,000 and Cleaning makes a profit of 15,000.
B) Catering makes a profit of 71,000 and Cleaning makes a profit of 9,000.
C) Catering makes a profit of 76,700 and Cleaning makes a profit of 3,300.
D) Catering makes a profit of 85,200 and Cleaning makes a loss of 5,200.

Correct Answer:

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