Hyde Corp. has three manufacturing divisions, each of which has been determined to be a...
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Hyde Corp. has three manufacturing divisions, each of which has been determined to be a reportable operating segment. In Year 4, Clay division had sales of $3 million, which was 25% of Hydes total sales, and had traceable operating costs of $1.9 million. In Year 4, Hyde incurred operating costs of $500,000 that were not directly traceable to any of the divisions. In addition, Hyde incurred interest expense of $300,000 in Year 4. The calculation of the measure of segment profit or loss reviewed by Hydes chief operating decision maker does not include an allocation of interest expense incurred by Hyde. However, it does include traceable costs. It also includes nontraceable operating costs allocated based on the ratio of divisional sales to aggregate sales. In reporting segment information, what amount should be shown as Clays operating profit for Year 4?
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