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

question 84

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:

Cash Flows

The movement of money into and out of a business, reflecting the company's operational, investing, and financing activities.

Net Worth

The total assets minus total liabilities of an individual or company, representing the owner's equity.

Financing Activities

Transactions related to funding the company, including issuing equity, borrowing loans, or paying dividends.

Investing Activities

Investing activities involve the purchase and sale of long-term assets and other investments, not including cash equivalents, reflected in the cash flow statement of a company.