Question

Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The corporation's net operating income is $11,500. The AFE Division's divisional segment margin is $80,100 and the GBI Division's divisional segment margin is $45,500. What is the amount of the common fixed expense not traceable to the individual divisions

Answer 1

Answer:

$114,100

Explanation:

Data provided:

corporation's net operating income = $11,500

FE Division's divisional segment margin = $80,100

GBI Division's divisional segment margin = $45,500

Now,

the total segment margin

= ( FE Division's divisional segment margin ) + ( GBI Division's divisional segment margin )

on substituting the respective values, we get

the total segment margin = $80,100 + $45,500 = $125,600

Thus,

the common fixed expense not traceable to the individual divisions will be calculated as:

= the total segment margin -corporation's net operating income

on substituting the respective values, we get

= $125,600 - $11,500

= $114,100