Question

Younie Corporation has two divisions: the South Division and the West Division. The corporation's net operating income is $26,900. The South Divisions divisional segment margin is $42,800 and the West Division's divisional segment margin is $29,900. What is the amount of the common fixed expense not traceable to the individual divisions?

Answer 1

$45,800

Step-by-step explanation:

The computation of the common fixed expense not traceable to the individual divisions is shown below:

= South Divisions divisional segment margin + West Division's divisional segment margin - Corporation's net operating income

= $42,800 + $29,900 - $26,900

= $45,800

We simply added both division segment margin and then the net income is deducted, so that the accurate value can come.