Campion Company has two divisions, A and B. The following data pertain to operations in May:

If common fixed expenses were $10,000, total fixed expenses were:

Question

Campion Company has two divisions, A and B. The following data pertain to operations in May:

If common fixed expenses were $10,000, total fixed expenses were:

Quizplus · Accepted Answer

Total fixed expenses can be calculated by adding the fixed expenses for both divisions. Fixed expenses for Division A are $20,000 and for Division B are $30,500, which adds up to $50,500. Since $10,000 is common to both divisions, it should not be counted twice. Therefore, the total fixed expenses are $40,500 (=$50,500-$10,000).

Campion Company Has Two Divisions, a and B