Question
O'Neill, Incorporated's segmented income statement for the most recent month is given below. Total Company Store A Store B Sales $398,000 $160,000 $238,000 Variable expenses
O'Neill, Incorporated's segmented income statement for the most recent month is given below. Total Company Store A Store B Sales $398,000 $160,000 $238,000 Variable expenses 261,980 116,800 145,180 Contribution margin 136,020 43,200 92,820 Traceable fixed expenses 82,400 25,000 57,400 Segment margin 53,620 $18,200 $35,420 Common fixed expenses 36,900 Net operating income $16,720 For each of the following questions, refer back to the above original data. 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 Store A's traceable fixed expenses of $11,600. If this proposal is implemented and sales remain constant, overall company net operating income should:
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