Question

Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $580,000, variable expenses of $301,600, and traceable fixed expenses of $186,500. The Alpha Division has sales of $510,000, variable expenses of $178,500, and traceable fixed expenses of $222,100. The total amount of common fixed expenses not traceable to the individual divisions is $235,500. What is the company's net operating income? Select one: a. $374,400 b. $201,300 c. $609,900 d. ($34,200)

Answer 1

Net income= -$34,200

Step-by-step explanation:

Giving the following information:

Beta Division:

Sales= $580,000

Variable expenses= $301,600

Traceable fixed expenses of $186,500.

Income= 91,900

Alpha Division:

Sales of $510,000

Variable expenses of $178,500

Traceable fixed expenses of $222,100.

Income= 109,400

The total amount of common fixed expenses not traceable to the individual divisions is $235,500.

We need to deduct from the income of each division the not traceable fixed costs.

Net income= 91,900 + 109,400 - 235,500

Net income= -$34,200