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 59

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

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Definitions:

Competitive Advantage

A condition that allows a company or country to produce goods or services at a lower price or in a more desirable fashion for customers than its competitors.

Organization's Culture

The shared values, beliefs, customs, and practices that influence the social and psychological environment of an organization.

Power

Refers to the ability or capacity of an individual or group to influence or direct the behavior of others or the course of events.

Political Behaviors

Actions in organizations that are aimed at using power and influence to achieve one's personal goals, which may not align with the organization's objectives.