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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Definitions:

Conformity Pressures

The pressure applied by a group that motivates individuals to modify their attitudes, values, or actions to conform with the norms of the group.

Polarization Theory

A theory suggesting that groups tend to make decisions that are more extreme than the initial inclination of its members.

Risky Shift Theory

suggests that people in groups tend to make riskier decisions compared to when making decisions alone due to diffused responsibility.

Prediscussion Judgments

Initial opinions and decisions held by individuals before engaging in a group discussion, which can influence the group's final decision-making process.