Younie corporation has two divisions: the south division and the west division. the corporation's net operating income is $26,900. the south division's 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?

Question

13-03-2018
Business

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Younie corporation has two divisions: the south division and the west division. the corporation's net operating income is $26,900. the south division's 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?

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talkingturkey talkingturkey · Answer 1 · 2018-03-24T08:38:04+01:00

Given:
Company's Net operating Income: $26,900
South division's divisional segment margin: $42,800
West division's divisional segment margin: $29,900

Divisional Segment margin: 72,700
Less: common fixed expenses: x
Company's Net Operating Income 26,900

Work back is needed:

26,900 + x = 72,700
x = 72,700 - 26,900
x = 45,800

The common fixed expenses not traceable to the individual divisions amounts to $45,800