Nantua Corporation Has Two Divisions,Southern and Northern

question 109

Multiple Choice

Nantua Corporation has two divisions,Southern and Northern.The following information was taken from last year's income statement segmented by division: Net operating income last year for Nantua Corporation was $400,000. If the Northern Division's sales last year were $300,000 higher,how would this have changed Nantua's net operating income? (Assume no change in selling prices,variable expenses per unit,or fixed expenses. )

• A)$30,000 increase
• B)$80,000 increase
• C)$120,000 increase
• D)$300,000 increase

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Definitions:

Diluted Earnings

Earnings per share calculated under the assumption that all convertible securities have been converted into common stock, providing a "worst case" scenario perspective on earnings per share.

Ownership Perspective

An approach or mindset focusing on the long-term benefits and responsibilities of owning an asset or investment.

GAAP

Generally Accepted Accounting Principles, a framework of accounting standards, principles, and procedures from which financial statements are prepared in the United States.

Cumulative

Pertaining to an aggregate or total amount added up over time, often used in context with dividends that are accumulated if not paid out.