Question

Younie Corporation has two divisions: the South Division and the West Division. The corporation's net operating income is $95,400. The South Division's divisional segment margin is $43,600 and the West Division's divisional segment margin is $174,300. What is the amount of the common fixed expense not traceable to the individual divisions?

Answer 1

Answer:

$122,500

Explanation:

Calculation for the amount of the common fixed expense not traceable to the individual divisions

First step is to calculate Total segment margin

Total segment margin = $43,600 + $174,300

Total segment margin= $217,900

Now let calculate the Common fixed expense

Common fixed expense = $217,900-$95,400

Common fixed expense $122,500

Therefore the amount of the common fixed expense not traceable to the individual divisions is $122,500