Nantor Corporation has two divisions, Southern and Northern. The following information was taken from last year's income statement segmented by division:

Nantor Corporation has two divisions, Southern and Northern. The following information was taken from last year's income statement segmented by division:

	Total Company		Southern			Northern
Sales	$	5,700,000	$	3,520,000		$	2,180,000
Contribution margin	$	2,500,000	$	1,560,000		$	940,000
Divisional segment margin	$	1,360,000	$	1,040,000		$	320,000

Net operating income last year for Nantor Corporation was $570,000.

In last year's income statement segmented by division, what were Nantor's total common fixed expenses?

Multiple Choice

• $1,140,000

  Incorrect
• $790,000

  Correct
• $2,150,000
• $1,930,000

Explanation

Net operating income = Total segment margin – Common fixed expenses

$570,000 = $1,360,000 – Common fixed expenses

Common fixed expenses = $1,360,000 – $570,000 = $790,000
Thank you!