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O'Neill, Incorporated's income statement for the most recent month is given below. Sales.......... Variable expenses.. ion Contribution margin. Traceable fixed expenses...... Segment margin. Common fixed
O'Neill, Incorporated's income statement for the most recent month is given below. Sales.......... Variable expenses.. ion Contribution margin. Traceable fixed expenses...... Segment margin. Common fixed expenses....... Net operating income Total Store A $300,000 $100,000 $200,000 192,000 72.000 120,000 Store B 108,000 28,000 80,000 Fi 76,000 21,000 55,000 32,000 $ 7,000 $25,000 27,000 $ 5,000 A proposal has been made that will lower variable expenses in Store A to 62% of sales. However, this reduction can only be accomplished by an increase in fixed expenses of $8,000. If this proposal is implemented and sales remain constant, overall company net operating income should: Select one: O a. remain the same O b. decrease by $4,200 O c. increase by $2,000 O d. increase by $8,000
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