Phillipson Corporation Has Two Divisions: the IEB Division and the PIH

question 168

Multiple Choice

Phillipson Corporation has two divisions: the IEB Division and the PIH Division.The corporation's net operating income is $83,900.The IEB Division's divisional segment margin is $149,700 and the PIH Division's divisional segment margin is $60,100.What is the amount of the common fixed expense not traceable to the individual divisions?

• A)$233,600
• B)$209,800
• C)$144,000
• D)$125,900

---

Definitions:

Inductive Reasoning

A logical process in which multiple premises, all believed true or found true most of the time, are combined to obtain a specific conclusion.

Accounting Theory

A framework of principles that underlie the practice and methodology of accounting in financial reporting.

Normative Theories

Theories that prescribe how things should be or how decisions should be made, often applied in ethics, economics, and law.

Positive Accounting Theory

An accounting theory that seeks to explain and predict accounting practices, focusing on the relationships between various parties involved in accounting.