Crazy Limited and Frog Limited Formed a Joint Operation and Share

Multiple Choice

Crazy Limited and Frog Limited formed a joint operation and share in the output of the joint operation 60:40. The joint operation paid a management fee of $40 000 to Crazy Limited during the current period. The cost to Crazy Limited of supplying the management service was $28 000. The amount of profit that Crazy Limited will recognise in relation to the provision of the management fee to the joint operation is:

A) nil.
B) $4800.
C) $7200.
D) $12 000.