Question

Corbel Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $47,800 for Division A. Division B had a contribution margin ratio of 25% and its sales were $235,000. Net operating income for the company was $35,700 and traceable fixed expenses were $55,400. Corbel Corporation's common fixed expenses were:_______.

Answer 1

Answer:

$15,450

Explanation:

The computation of the common fixed expenses is shown below:

We know that,

Net operating income = Contribution margin + Sales × contribution margin -  traceable fixed expenses - common fixed expenses

$35,700 = $47,800 + $235,000 × 25% - $55,400  - common fixed expenses

$35,700 = $47,800 + $58,750 - $55,400  - common fixed expenses

$35,700= $47,800 + 3,350   - common fixed expenses

So, the common fixed expense would be $15,450