Verkamp Corporation has two divisions: the YDI Division and the QCC Division. The corporation's net operating income is $31,800. The YDI Division's divisional segment margin is $111,800 and the QCC Division's divisional segment margin is $152,800. What is the amount of the common fixed expense not traceable to the individual divisions?
A) $143,600
B) $184,600
C) $264,600
D) $232,800

Question

Quizplus · Accepted Answer

To find the amount of the common fixed expense not traceable to the individual divisions, we need to use the formula: Net Operating Income = YDI Division Segment Margin + QCC Division Segment Margin + Common Fixed Expense Not Traceable.

Substituting the given values, we get:

$31,800 = $111,800 + $152,800 + Common Fixed Expense Not Traceable
Common Fixed Expense Not Traceable = $31,800 - $111,800 - $152,800
Common Fixed Expense Not Traceable = $232,800

Therefore, the common fixed expense not traceable to the individual divisions is $232,800. The answer is D.

Verkamp Corporation Has Two Divisions: the YDI Division and the QCC