O'Neill, Incorporated's Segmented Income Statement for the Most Recent Month

question 161

Multiple Choice

O'Neill, Incorporated's segmented income statement for the most recent month is given below. For each of the following questions, refer back to the above original data. A proposal has been made that will lower variable expenses in Store A to 62% of sales. However, this reduction can only be accomplished by an increase in Store A's traceable fixed expenses of $8,000. If this proposal is implemented and sales remain constant, overall company net operating income should:

• A)remain the same
• B)decrease by $4,200
• C)increase by $2,000
• D)increase by $8,000

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