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27 July, 21:26

Sugiki Corporation has two divisions: the Alpha Division and the Delta Division. The Alpha Division has sales of $820,000, variable expenses of $369,000, and traceable fixed expenses of $347,300. The Delta Division has sales of $460,000, variable expenses of $294,400, and traceable fixed expenses of $134,100. The total amount of common fixed expenses not traceable to the individual divisions is $97,300. What is the company's net operating income

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  1. 27 July, 22:40
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    Net operating profit = $37,900

    Explanation:

    Giving the following information:

    The Alpha Division:

    Sales = $820,000

    Variable expenses = $369,000

    Traceable fixed expenses of $347,300

    The Delta Division:

    Sales = $460,000

    Variable expenses = $294,400

    Traceable fixed expenses of $134,100.

    The total amount of common fixed expenses not traceable to the individual divisions is $97,300.

    First, we need to calculate the net profit for each division and then subtract the common fixed expenses:

    Alpha = 820,000 - 369,000 - 347,300 = 103,700

    Delta = 460,000 - 294,400 - 134,100 = 31,500

    Common fixed expense = (97,300)

    Net operating profit = $37,900
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