Ieso Corporation Has Two Stores: J and K

question 119

Multiple Choice

Ieso Corporation has two stores: J and K. During November, Ieso Corporation reported a net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was $100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales. Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K.
-Ieso Corporation's total fixed expenses for the year were:

• A) $40,000
• B) $100,000
• C) $140,000
• D) $170,000

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Definitions:

Income Statement

A financial statement that shows a company's revenues, expenses, and profits over a specific period.

Extraordinary Gains

Profits from events or transactions that are both unusual in nature and infrequent in occurrence, though this distinction has been eliminated in current accounting practices.

Pretax Loss

The loss a company incurs before taxes are deducted.

Pretax Gain

The profit a company has made before any taxes have been applied.