Question

ounie 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 $45,100 and the West Division's divisional segment margin is $185,500. What is the amount of the common fixed expense not traceable to the individual divisions

Answer 1

Answer:

$135,200

Explanation:

With regards to the above information, both sales and variable cost are dependent on the number of units sold.

The contribution margin is arrived at by deducting the variable cost from sales. Also, the contribution margin minus the fixed cost gives net operating income.

Therefore, total fixed cost of the corporation not traceable to individual division

= $185,500 + $45,100 - $95,400

= $135,200