Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The corporation's net operating income is $11,500. The AFE Division's divisional segment margin is $80,100 and the GBI Division's divisional segment margin is $45,500. What is the amount of the common fixed expense not traceable to the individual divisions?

Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The corporation's net operating income is $11,500. The AFE Division's divisional segment margin is $80,100 and the GBI Division's divisional segment margin is $45,500. What is the amount of the common fixed expense not traceable to the individual divisions?

Multiple Choice

• $91,600
• $125,600
• $114,100

  Correct
• $57,000

Answer

Net operating income = Segment margin − Common fixed expenses

$11,500 = ($80,100 + $45,500) − Common fixed expenses

$11,500 = $125,600 − Common fixed expenses

Common fixed expenses = $125,600 − $11,500 = $114,100

Thanks