Question

Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The corporation's net operating income is $12,300. The AFE Division's divisional segment margin is $84,100 and the GBI Division's divisional segment margin is $48,700. What is the amount of the common fixed expense not traceable to the individual divisions?

Answer 1

Answer:

$120,500

Explanation:

Uchimura Corporation

Total Company

Divisional segment margin $132,800

($84,100 + $48,700)

Less common fixed costs not traceable to the individual divisions X

Net operating income $ 12,300

Hence:

Common fixed costs not traceable to the individual divisions= $132,800 − $12,300

= $120,500

Therefore the amount of the common fixed expense not traceable to the individual divisions will be $120,500