Asked by Lourie Peters on Jul 08, 2024
Verified
Uchimura Corporation has two divisions: the AFE Division and the GBI Division.The corporation's net operating income is $42,000.The AFE Division's divisional segment margin is $15,700 and the GBI Division's divisional segment margin is $175,400.What is the amount of the common fixed expense not traceable to the individual divisions?
A) $149,100
B) $57,700
C) $217,400
D) $191,100
Common Fixed Expenses
Expenses that do not change with the volume of production or sales and are shared among different segments or products of a business.
Divisional Segment Margin
The profit or loss generated by a specific division or segment of a business, excluding costs not directly tied to that division.
- Make a distinction and calculate the repercussions of traceable in contrast to common fixed costs on the financial health of both the divisions and the overarching corporation.
- Apprehend the influence of segment margins and mutual fixed costs on the aggregate net operating income.
Verified Answer
IS
Ibtissam SanjarJul 12, 2024
Final Answer :
A
Explanation :
Net operating income = Segment margin - Common fixed expenses
$42,000 = ($15,700 +$175,400)- Common fixed expenses
$42,000 = $191,100 - Common fixed expenses
Common fixed expenses = $191,100 - $42,000 = $149,100
$42,000 = ($15,700 +$175,400)- Common fixed expenses
$42,000 = $191,100 - Common fixed expenses
Common fixed expenses = $191,100 - $42,000 = $149,100
Learning Objectives
- Make a distinction and calculate the repercussions of traceable in contrast to common fixed costs on the financial health of both the divisions and the overarching corporation.
- Apprehend the influence of segment margins and mutual fixed costs on the aggregate net operating income.
Related questions
Younie Corporation Has Two Divisions: the South Division and the ...
Eyestone Corporation Has Two Divisions, a and B ...
WV Construction Has Two Divisions: Remodeling and New Home Construction ...
Holts Corporation Has Two Divisions: Xi and Sigma ...
Combe Corporation Has Two Divisions: Alpha and Beta ...