Cotton Corp. has three divisions. Division A currently has a net loss of $50,000 as follows: Division A Sales revenue $500,000 Less: Variable costs 300,000 Contribution margin $200,000 Less: Direct fixed costs 100,000 Segment margin $100,000 Less: Common fixed costs 150,000 Net operating income (loss) ($50,000) Eliminating Division A would eliminate $100,000 of direct fixed costs. The $150,000 of common fixed costs would be redistributed to Cotton Corp.'s remaining product lines. Will Cotton Corp.'s net operating income increase or decrease if the Division A is eliminated? By how much? increase by 50,000 O decrease by $100,000 increase by $100,000 decrease by 150,000 QUESTION 25 Jaybird Inc. produces leather handbags. The sales budget for the next three months is: June 7,000 units, July 6500 unit and August 6800 units. Jaybird Inc.'s ending finished goods inventory policy is 10% of the following month's sales. June 1 beginning inventory is estimated to be 1,000 units. How many units will be produced in June? 6650 units 8,000 units 7,000 units 7350 units QUESTION 26 Becker Bikes manufactures tricycles. The company expects to sell 780 units in September and 750 units in October. Beginning and ending finished goods for September are expected to be 200 and 250 units, respectively. October's ending finished goods are expected to be 220 units. Compute Becker's production budget for September. QUESTION 27 Refer to Becker Bikes. Compute Becker's production budget for October