Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period:
The common fixed expenses have been allocated to the divisions on the basis of sales.
-What is the company's overall net operating income if it operates at the break-even points for its two divisions?
A) $(79,420)
B) $21,700
C) $(265,420)
D) $0

Question

Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period:
  The common fixed expenses have been allocated to the divisions on the basis of sales.
-What is the company's overall net operating income if it operates at the break-even points for its two divisions?
A) $(79,420) 
B) $21,700 
C) $(265,420) 
D) $0

Quizplus · Accepted Answer

If the company operates at the break-even points for its two divisions, it will not cover its common fixed expense of $79,420.

Neelon Corporation Has Two Divisions: Southern Division and Northern Division