Question

Fernstrom Corporation has two divisions: East and West. Data from the most recent month appear below: East West Sales $ 330,000 $ 144,000 Variable expenses $ 132,000 $ 76,320 Traceable fixed expenses $ 140,000 $ 43,000 The company’s common fixed expenses total $52,140. If the company operates at exactly the break-even sales of the East Division and West Division, what would be the company’s overall net operating income

Answer 1

Use the formula P = I - d, where P is the net pay, I is the gross income and d is the deductions.

a.

$53,140 is the net pay

b.

$77,860 is the net pay

c.

$72,860 is the net pay

d.

$52,140 is the net pay

Answer 2

The company’s overall net operating income would be $52,140

Step-by-step explanation:

If the all divisions of the company are operates at break even level the overall net operating income of the company would be zero . because at break even level the sales value is equals to total variable cost plus total fixed cost if the company incurring any addition fixed cost then the over all net operating income will show loss of additional fixed incurred. The answer for the given question is the overall net operating income of the company would be ($52,140).