Question

J Corporation has two divisions. Division A has a contribution margin of $79,300 and Division B has a contribution margin of $126,200. If total traceable fixed expenses are $72,400 and total common fixed expenses are $34,900, what is J Corporation's net operating income?

Answer 1

Contribution margin of division A = $79,300

Contribution margin of division B = $126,200

Traceable fixed expenses = $72,400

Common fixed expenses = $34,900

Net operating income = Contribution margin of division A+Contribution margin of division B-Traceable fixed expenses-Common fixed expenses

= 79,300+126,200-72,400-34,900

= $98,200

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