O\'Neill, Incorporated\'s segmented income statement for the most recent month i
ID: 2448001 • Letter: O
Question
O'Neill, Incorporated's segmented income statement for the most recent month is given below.
The marketing department believes that a promotional campaign at Store A costing $12,400 will increase sales by $21,400. If its plan is adopted, overall company net operating income should:
rev: 10_20_2014_QC_55378
decrease by $6,591
increase by $9,000
increase by $440
decrease by $440
Total Store A Store B Sales $151,000 $60,600 $90,400 Variable expenses 49,552 24,240 25,312 Contribution margin 101,448 36,360 65,088 Traceable fixed expenses 62,400 15,000 47,400 Segment margin 39,048 $21,360 $17,688 Common fixed expenses 19,800 Net operating income $ 19,248Explanation / Answer
An expense of $12,400 would increase sales by $21,400
That is the net profit would increase by $21400-$12400= $9000
Therefore overall company net operating income should increase by $9000
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