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

question 122

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. If Store B sales increase by $20, 000 with no change in fixed expenses, the overall company net operating income should:

• A)increase by $2, 500
• B)increase by $5, 000
• C)increase by $8, 000
• D)increase by $12, 000

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Definitions:

Tax-exempt Income

Income that is not subject to federal income tax, such as certain interest income from municipal bonds.

Ordinary Income

Income earned from standard operations, subject to standard tax rates, including wages, salaries, commissions, and interest.

Distributed

In finance, refers to the allocation of dividends or other payouts to shareholders from a corporation's earnings.

Recognized

Acknowledged or understood, often referring to income, gains, or losses for tax purposes.