Hammerhold Company has two divisions with the following segment margins for the current year: Northern, $250,000; Southern, $450,000. Common expenses of the company are $55,000. What is Hammerhold Company's net income?
A) $165,000
B) $700,000
C) $645,000
D) $750,000

Question

Quizplus · Accepted Answer

To calculate Hammerhold Company's net income, we need to subtract the common expenses from the total segment margins. 
Total segment margins = Northern segment margin + Southern segment margin = $250,000 + $450,000 = $700,000 
Net income = Total segment margins - Common expenses = $700,000 - $55,000 = $645,000

Hammerhold Company Has Two Divisions with the Following Segment Margins