Question
O'Neill, Incorporated's segmented income statement for the most recent month is given below. Total Company Store A Store B Sales $300,000 $100,000 $200,000 Variable expenses
O'Neill, Incorporated's segmented income statement for the most recent month is given below.
| Total Company | Store A | Store B |
Sales | $300,000 | $100,000 | $200,000 |
Variable expenses | 192,000 | $72,000 | $120,000 |
Contribution margin | 108,000 | 28,000 | 80,000 |
Traceable fixed expenses | 76,000 | 21,000 | 55,000 |
Segment margin | 32,000 | 7,000 | 25,000 |
Common fixed expenses | 27,000 | ||
Net operating income | $5,000 |
For each of the following questions, refer back to the above original data.
If Store B sales increase by $20,000 with no change in fixed expenses, the overall company net operating income should:
increase by $2,500
increase by $5,000
increase by $8,000
increase by $12,000
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