Ring, Incorporated's income statement for the most recent month is given below.

For each of the following questions, refer back to the original data.

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Part 1. If Store Q sales increase by $30,000 with no change in fixed expenses, the overall company net operating income should:

a. increase by $18,000

b. increase by $7,500

c. increase by $12,000

d. increase by $3,750

Part 2) The marketing department believes that a promotional campaign at Store P costing $5,000 will increase sales by $15,000. If the campaign is adopted, overall company net operating income should:

a. increase by $10,000

b. increase by $5,800

c. decrease by $5,800

d. decrease by $800

Part 3) A proposal has been made that will lower variable costs in Store P to 65% of sales. However, this reduction can only be accomplished by a $16,000 increase in Store P's traceable fixed costs. If this proposal is implemented and sales remain constant, overall company net operating income should:

a. decrease by $2,000

b. increase by $2,000

c. increase by $14,000

d. remain the same

Sales Variable expenses... Contribution margin Traceable fixed expenses Segment margin....................... Common fixed expenses Net operating income Total Store P Store Q $600,000 $200,000 400,000 384,000 144,0000 240,000 216,000 56,000 160,000 42,000 152,000 110,000 64,000 S 14,000 S 00 34,000 S 00