Reynolds Co is considering dropping their home appliances segment. Information related to their home appliances segment is as follows: According to the Service Company Insight article "The Implications of Budgetary Optimism", what is the most difficult thing for governments to estimate when creating budgets?

Costs of payroll because turnover is so high.

Revenues because a high percentage of home owners don't pay their property taxes.

Revenues because income taxes and sales taxes can fluctuate wildly.

Costs of road construction because direct material prices fluctuate. McDermott Corporation is a wholesaler. All of their sales are on account and they estimate the following sales figures for the next $3$ months:

McDermott Corporation has the following collection pattern for their sales: $65\%$ in month of sale; $25\%$ in month after sale; $5\%$ in second month after sale; $5\%$ uncollectible.

What are McDermott Corporation's expected collections from customers for June?

$$6,325$

$$6,000$

$$6,025$

$$3,900$

If the segment is dropped, the general factory overhead would be reallocated to other segments. Using incremental analysis, how much would net income increase or decrease

by if management were to drop the home appliances segment?

Net income would decrease by $$139,000$

Net income would increase by $$163,000$

Net income would decrease by $$163,000$

Net income would decrease by $$24,000$