Question

The following information was taken from last year's income statement segmented by division:

East Division West Division
Sales $3,700,000 $2,300,000
Contribution margin $1,650,000 $1,000,000
Divisional segment margin $1,100,000 $350,000

Net operating income last year for SegR-3748 Corporation was $600,000. In last year's income statement segmented by division, what were SegR-4212's total common fixed expenses?

Answer 1

Answer:

$850,000

Explanation:

Divisional Segment Margin = $1,100,000 + $350,000

Divisional Segment Margin = $1,450,000

Net Operating Income = $600,000

Common fixed expenses = Divisional Segment Margin - Net Operating Income

Common fixed expenses = $1,450,000 - $600,000

Common fixed expenses = $850,000

So, SegR-4212's total common fixed expenses will be $850,000.