Keefe Corporation has two divisions: Western Division and Eastern Division.The following report is 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)$17, 160
B)$(75, 240)
C)$(228, 240)
D)$0

Question

Keefe Corporation has two divisions: Western Division and Eastern Division.The following report is 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)$17, 160 
B)$(75, 240) 
C)$(228, 240) 
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 $75, 240.

Keefe Corporation Has Two Divisions: Western Division and Eastern Division