1.
Sugiki Corporation has two divisions: the Alpha Division and the Delta Division. The Alpha
Division has sales of $892,000, variable expenses of $402,300, and traceable fixed expenses of
$377,900. The Delta Division has sales of $505,000, variable expenses of $321,400, and
traceable fixed expenses of $145,800. The total amount of common fixed expenses not traceable
to the individual divisions is $105,400. What is the company's net operating income?
Solution
Sugiki corportion
Alpha                                 Â
Delta                          total
Sales                          Â
$892,000Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
$505,000Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $1397,000
Less:
Variable expenses      Â
402,300Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
321,400Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 723,700
Fixed
exp                       377,900           Â
                      145,800              Â
          523,700
Less:
non traceable fixed          -
                                       Â
    - 105,400
Company's net operating income $Â Â Â 44,200