1. What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?
The West Division of Fitzmaurice Corporation had average operating assets of $450,000 and net operating
income of $87,300 in November. The minimum required rate of return for performance evaluation purposes is
2. What was the West Division's minimum required return in November?
3. Bonniwell Corporation has two divisions: the Delta Division and the Alpha Division. The Delta Division has
sales of $620,000, variable expenses of $359,600, and traceable fixed expenses of $229,200. The Alpha
Division has sales of $820,000, variable expenses of $541,200, and traceable fixed expenses of $172,900. The
total amount of common fixed expenses not traceable to the individual divisions is $122,000. What is the
company's net operating income?
Kulp Corporation has two major business segments-East and West. In July, the East business segment had sales
revenues of $900,000, variable expenses of $441,000, and traceable fixed expenses of $171,000. During the
same month, the West business segment had sales revenues of $450,000, variable expenses of $234,000, and
traceable fixed expenses of $45,000. The common fixed expenses totaled $321,000 and were allocated as
follows: $180,000 to the East business segment and $141,000 to the West business segment.