Question

Younie Corporation has two divisions: the South Division and the West Division. The corporation's net operating income is $97,100. The South Division's divisional segment margin is $46,600 and the West Division's divisional segment margin is $173,800. What is the amount of the common fixed expense not traceable to the individual divisions?Multiple Choice
a. $270,900
b. $143,700
c. $123,300
d. $220,400

Answer 1

Answer:

Correct option C $123,300

Explanation:

The amount of the common fixed expense not traceable to the individual divisions = South Division's divisional segment margin + West Division's divisional segment margin - Corporation's net operating income

= $46,600 + $173,800 - $97,100

= $123,300