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

question 20

Multiple Choice

A segment has the following data: $$\begin{array} { l r } \text { Sales } & \$ 700,000 \\\text { Variable expenses } & 300,000 \\\text { Fixed expenses } & 550,000\end{array}$$ 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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