North Division Has the Following Information $$\begin{array} { l r } \text { Sales } & \$ 1,200,000 \\\text { Variable expenses } & 640,000 \\\text { Fixed expenses } & 620,000\end{array}$$

question 112

Multiple Choice

North Division has the following information: $$\begin{array} { l r } \text { Sales } & \$ 1,200,000 \\\text { Variable expenses } & 640,000 \\\text { Fixed expenses } & 620,000\end{array}$$ If this division is eliminated, the fixed expenses will be allocated to the company's other divisions. What is the incremental effect on net income if the division is dropped?

• A)$60,000 increase
• B)$620,000 decrease
• C)$560,000 decrease
• D)$580,000 increase