Normandy Company has the following information pertaining to its two divisions for 2014: Common expenses are $24,000 for 2014.
What is the operating income for Normandy Company?
A) $65,000
B) $325,000
C) $41,000
D) $300,000

Question

Normandy Company has the following information pertaining to its two divisions for 2014:  Common expenses are $24,000 for 2014.
What is the operating income for Normandy Company?
A) $65,000 
B) $325,000 
C) $41,000 
D) $300,000

Quizplus · Accepted Answer

To calculate the operating income for Normandy Company, we need to subtract the total expenses (including common expenses) from the total revenue generated by both divisions.

Total revenue for both divisions = $350,000 + $40,000 = $390,000

Total expenses for both divisions = $280,000

Operating income before common expenses = $110,000

Operating income after deducting common expenses = $86,000

Therefore, the operating income for Normandy Company is $41,000 (the operating income after deducting common expenses divided by 2 as there are 2 divisions).

Normandy Company Has the Following Information Pertaining to Its Two