The Rial Company's Income Statement for June Is Given Below

question 115

Multiple Choice

The Rial Company's income statement for June is given below:
-A proposal has been made that will lower variable expenses in Division L to 35% of sales.However,this reduction can only be accomplished by a $15,000 increase in Division L's traceable fixed expenses.If this proposal is implemented and if sales remain constant,overall company net operating income should:

• A)increase by $15,000
• B)increase by $24,000
• C)decrease by $15,000
• D)decrease by $6,000