Ring, Incorporated\'s income statement for the most recent month is given below.

Question

Ring, Incorporated's income statement for the most recent month is given below. For each of the following questions, refer back to the original data. A proposal has been made that will lower variable costs in Store P to 65% of sales. However, this reduction can only be accomplished by a $16,000 increase in Store P's traceable fixed costs. If this proposal is implemented and sales remain constant, overall company net operating income should: A) remain the same B) decrease by $2,000 C) increase by $2,000 D) increase by $14,000

Explanation / Answer

company net operating income should:
= -16000+14000 = -2000

b) decrease by $2,000

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