A Segment Has the Following Data $\begin{array}{lr}\text { Sales } & \$ 700,000 \\\text { Variable expenses } & 300,000 \\\text { Fixed expenses } & 550,000\end{array}$

question 135

Multiple Choice

A segment has the following data: $\begin{array}{lr}\text { Sales } & \$ 700,000 \\\text { Variable expenses } & 300,000 \\\text { Fixed expenses } & 550,000\end{array}$ What will be the incremental effect on net income if this segment is eliminated, assuming the fixed expenses will be allocated to profitable segments?

• A)$400,000 increase
• B)$400,000 decrease
• C)$5,000 decrease
• D)Cannot be determined from the data provided.

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Definitions:

Life Insurance

A contract providing payment to designated beneficiaries upon the insured person’s death, offering financial protection against the loss of income.

Health Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured or reimburses them for expenses from illnesses or injuries.

Workers' Compensation Insurance

Insurance that provides medical benefits and wage replacement to employees injured on the job.

FUTA

This Act enforces a payroll tax on enterprises to finance state labor agencies, known as the Federal Unemployment Tax Act.