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SSC Financial and Cost Accounting P-1 QUESTION #9644
Question 1
In Departmental Accounts, income tax expense is allocated among departments on the basis of:
  • Sales revenue of each department
  • Number of employees in each department
  • Area occupied by each department
  • Departmental operating profits✔️
Correct Answer Explanation
According to the FIN611 text, income tax expense is divided on the basis of departmental operating profits. This is unlike other operating expenses which are allocated on bases such as sales, employees, or floor area.