Phillipson Corporation has two divisions: the IEB Division and the PIH Division.The corporation's net operating income is $83,900.The IEB Division's divisional segment margin is $149,700 and the PIH Division's divisional segment margin is $60,100.What is the amount of the common fixed expense not traceable to the individual divisions?
A)$233,600
B)$209,800
C)$144,000
D)$125,900

Question

Quizplus · Accepted Answer

Net operating income = Segment margin - Common fixed expenses
$83,900 = ($149,700 +$60,100)- Common fixed expenses
$83,900 = $209,800 - Common fixed expenses
Common fixed expenses = $209,800 - $83,900 = $125,900

Phillipson Corporation Has Two Divisions: the IEB Division and the PIH