What amount should be reported as profit for segment no one

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Reference no: EM132805673

Cloy Company has three lines of business, each of which was determined to be reportable segment. The entity sales aggregated P7,500,000 in the current year, of which Segment No. 1 contributed 40%.

Traceable costs were P1,750,000 for Segment No. 1 out of a total of P5,000,000 for the entity as a whole.

Problem 1: For external reporting, the entity allocated common costs of P1,500,000 based on the ratio of a segment's income before common costs to the total income before common costs. In the financial statements for the current year, what amount should be reported as profit for Segment No. 1?

a. 1,250,000

b. 1,000,000

c. 650,000

d. 500,000

Reference no: EM132805673

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