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Hancock Company manufactures and sells two lines of furniture, case goods and upholstery. During the most recent accounting period, the Case Goods and Upholstery Divisions
Hancock Company manufactures and sells two lines of furniture, case goods and upholstery. During the most recent accounting period, the Case Goods and Upholstery Divisions sold 19,600 and 2,690 units, respectively. The company's most recent financial statements are shown below: (Do not round intermediate calculations.) Sales Less cost of goods sold: Unit-level production cost Depreciation, production equipment Gross margin Less operating expenses: Unit-level selling and administrative costs Corporate-level facility expenses (fixed) Net income (loss) Case Goods $2,083,000 Upholstery $538,000 1,299,000 322,800 309,000 80,700 $ 475,000 $134,500 78,400 75,000 67,250 75,000 $ 321,600 $ (7,750) If unit sales for both divisions increased 10%, the company would report which of the following? Multiple Choice A net income for the Upholstery Division of $7,045 A $75,000 increase in net income for the Upholstery Division
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