Question

The company's fixed costs that are traceable to the Northern branch is $175,000, while fixed costs that are traceable to the Southern branch is $180,000. The Northern branch is further divided into two segments based on the customer types: the local and the nonlocal. Traceable fixed cost for the local is $68,250, and traceable fixed cost for the nonlocal is $88,700.

How much is the common fixed costs of the two order types for the Northern branch?

Answer 1

Answer:

$18,050

Explanation:

The computation of the common fixed cost of two order types for the northern branch is shown below:

= Company fixed cost traceable to the northern branch   - traceable fixed cost for the local - traceable fixed cost for the non local

= $175,000 - $68,250 - $88,700

= $18,050

For computing it we simply deducted the traceable fixed cost from the company fixed cost so that the common fixed cost for the two orders types could come

The common fixed cost is the cost which supports more than the one division in the same business