Taft Corp. discloses supplemental industry information. The following information is available for 1992:

Additional 1992 expenses, not included above, as  follows

Indirect operating expenses        7,200

General corporate expenses        4,800

Segment C’s 1992 operating profit was

a)      5,000

b)      3,200

c)       2,600

d)      2,000

The correct answer is A!  Shouldn’t we allocate indirect operating and general corporate expenses to each segment to determine the net profit?

Any comment is appreciated

no, to determine Net Profit of Operating Segments, you only review the information relative to the costs and revenues of that segment.

It's the information that the COO would review to determine the profitability of the segment.