Operating Company
Operating Company Has the Following Information Pertaining to Its

question 11

Multiple Choice

Operating Company
Operating Company has the following information pertaining to its two divisions for the current year: $\begin{array}{lrr}&\text { North }\\&\text { Division }&\text { South Division }\\\text { Variable selling and administrative expenses } & \$ 70,000 & \$ 90,000 \\\text { Direct fixed manufacturing expenses } & 35,000 & 100,000 \\\text { Sales } & 300,000 & 500,000 \\\text { Direct fixed selling and administrative expenses } & 30,000 & 70,000 \\\text { Variable manufacturing expenses } & 40,000 & 100,000\end{array}$ Common expenses are $50,000 for the current year.
-Refer to Operating Company. What is the net income?

• A) $41,000
• B) $65,000
• C) $215,000
• D) $325,000

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Definitions:

Motivate

To motivate means to inspire, encourage, and stimulate individuals or groups to pursue goals, improve performance, or engage in specific behaviors through various strategies and incentives.

Designated Goals

Specific, predetermined objectives that an individual or organization aims to achieve within a certain timeframe.

Expectancy Theory

A motivational theory positing that individuals are motivated to act in a certain way based on the expectation that their actions will lead to a desired outcome.

Situational Approach

A leadership model that proposes the effectiveness of a leadership style is dependent on the context or situation.