Question

Yuri's Yacht Company manufactures and sells Yacht's to cusomers. Yuri's Yacht Company has two divisions: the North Division and the South Division. Yuri's Yacht Company's net operating income is $93,000. The North Division's divisional segment margin is $44,000 and the South Division's divisional segment margin is $174,600. What is the amount of the common fixed expense not traceable to the individual divisions?

Multiple Choice

• $267,600

• $218,600

• $125,600

• $137,000

Answer 1

Ans.	Option 3rd $125,600
		North	South	Total company
	Office segment margin	$44,000	$174,600	$218,600
	Net operating income			-$93,000
	Common fixed expenses			$125,600
	*Common fixed expenses are not traceable to individual divisions. So, the common fixed expenses
	will be the difference between total company's office segment margin and net operating income of
	the coompany.