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Common Fixed Expenses

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Nantua Sunglasses Corporation has two divisions, Southern and Northern. The following information was taken from last year's income statement segmented by division:

Total Southern Northern
Sales 4,600,000 3,000,000 1,600,000
Contribution margin 1,940,000 1,380,000 560,000
Divisional segment margin 1,016,000 840,000 176,000

Net operating income last year for Nantua Company was 400,000.
Reference: 12-4

In last year's income statement segmented by division, what were Nantua's total common fixed expenses?

2,660,000
924,000
1,540,000
616,000

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The solution explains how to calculate the common fixed expenses.

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