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Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $325,000, variable expenses of $159,600, and traceable fixed expenses of $72,800. The Alpha Division has sales of $635,000, variable expenses of $345,800, and traceable fixed expenses of $135,900. The total amount of common fixed expenses not traceable to the individual divisions is $138,200. What is the company's net operating income?

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Answer:

Net operating income= $107,700

Explanation:

Giving the following information:

Beta Division:

Sales= $325,000

Variable expense= $159,600

Traceable fixed expense= $72,800

Alpha Division:

Sales= $635,000

Variable expense= $345,800

Traceable fixed expense= $135,900

We need to calculate the net operating income:

Beta division partial income= 325,000 - 159,600 - 72,800= 92,600

Alpha division partial income= 635,000 - 345,800 - 135,900= 153,300

Common fixed expense= (138,200)

Net operating income= $107,700

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