Bonniwell Corporation has two divisions: the Delta Division and the Alpha Division. The Delta Division has sales of $620,000, variable expenses of $359,600, and traceable fixed expenses of $229,200. The Alpha Division has sales of $820,000, variable expenses of $541,200, and traceable fixed expenses of $172,900. The total amount of common fixed expenses not traceable to the individual divisions is $122,000. What is the company's net operating income?
A) $539,200
B) $15,100
C) $137,100
D) $417,200

Question

Quizplus · Accepted Answer

The net operating income is calculated by subtracting total expenses from total sales. For Delta: $620,000 - $359,600 - $229,200 = $31,200. For Alpha: $820,000 - $541,200 - $172,900 = $105,900. Combined divisional income: $31,200 + $105,900 = $137,100. Subtract common fixed expenses: $137,100 - $122,000 = $15,100.

Bonniwell Corporation Has Two Divisions: the Delta Division and the Alpha