Pevy 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)$(36, 520)
B)$33, 080
C)$0
D)$(206, 520)

Question

Pevy 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)$(36, 520) 
B)$33, 080 
C)$0 
D)$(206, 520)

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 $36, 520.

Pevy Corporation Has Two Divisions: Southern Division and Northern Division