Question

Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $285,000, variable expenses of $147,600, and traceable fixed expenses of $68,800. The Alpha Division has sales of $595,000, variable expenses of $329,800, and traceable fixed expenses of $129,500. The total amount of common fixed expenses not traceable to the individual divisions is $130,200. What is the company's net operating income

Answer 1

The net operating income of Miscavage Corporation is $93,100.

Step-by-step explanation:

The net operating income of Miscavage Corporation can be calculated by taking the total sales revenue minus the total expenses. The total sales revenue is calculated by adding the sales of the Beta Division and the Alpha Division, which gives $285,000 + $595,000 = $880,000. The total expenses include the variable expenses, traceable fixed expenses, and common fixed expenses. Therefore, the net operating income is calculated as follows:

Total Sales Revenue - Total Expenses = $880,000 - ($147,600 + $68,800 + $329,800 + $129,500 + $130,200) = $93,100

Answer 2

$880,000 is the net operating income