Nantor Corporation has two divisions, Southern and Northern. The following information was taken from last year's income statement segmented by division: Net operating income last year for Nantor Corporation was $800,000.
In last year's income statement segmented by division, what were Nantor's total common fixed expenses?
A) $1,300,000
B) $1,600,000
C) $1,250,000
D) $1,200,000

Question

Nantor Corporation has two divisions, Southern and Northern. The following information was taken from last year's income statement segmented by division:  Net operating income last year for Nantor Corporation was $800,000.
In last year's income statement segmented by division, what were Nantor's total common fixed expenses?
A) $1,300,000 
B) $1,600,000 
C) $1,250,000 
D) $1,200,000

Quizplus · Accepted Answer

Net operating income = Total segment margin - Common fixed expenses
$800,000 = $2,000,000 - Common fixed expenses
Common fixed expenses = $2,000,000 - $800,000 = $1,200,000

Nantor Corporation Has Two Divisions, Southern and Northern