QUESTION 24 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? O decrease by 150,000 increase by $100,000 O decrease by $100,000 O increase by 50,000 QUESTION 25 2 p 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? O 8,000 units 7350 units 6650 units O 7,000 units