Operating Company Has the Following Information Pertaining to Its Two

question 93

Multiple Choice

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

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

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Definitions:

Creditor Grants Concession

A situation where a creditor agrees to reduce or restructure a debtor's obligation under financial distress conditions, making it easier for the debtor to manage their debt.

Securitization Entity's Credit Rating

A measure of creditworthiness assigned to entities that bundle and sell receivables or other financial assets in the form of securities.

Trouble Debt Restructuring

A process where the terms of a debt are modified due to the borrower's financial difficulties to provide relief.

Debt Terms

Debt terms refer to the conditions under which a loan or bond is issued, including interest rate, repayment period, and any other stipulations.