View the step-by-step solution to: Question 18: (1 point) O'Neill, Incorporated's income statement

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Question 18: (1 point)
O'Neill, Incorporated's income statement for the most recent month is given below.
Total Store A Store B
Sales   $540,000 $160,000 $380,000
Variable expenses   352,800 94,400 258,400
Contribution margin   187,200 65,600 121,600
Traceable fixed expenses     75,000    20,000    55,000
Segment margin   112,200 $ 45,600 $ 66,600
Common fixed expenses      27,000
Net operating income   $ 85,200
The marketing department believes that a promotional campaign at Store A costing $3,000 will increase sales by $16,000. If its plan is adopted, overall company net operating income should:
increase by $3,560
increase by $3,710
decrease by $3,835
decrease by $3,770

Question 18: (1 point)
O'Neill, Incorporated's income statement for the most recent month is
given below.
 
Total
Store A
Store B
Sales   
$540,000
$160,000
$380,000
Variable expenses   
352,800
94,400
258,400
Contribution margin   
187,200
65,600
121,600
Traceable fixed expenses   
  75,000
   20,000
   55,000
Segment margin   
112,200
$ 45,600
$ 66,600
Common fixed expenses   
   27,000
 
 
Net operating income   
$ 85,200
 
 
The marketing department believes that a promotional campaign at Store A
costing $3,000 will increase sales by $16,000. If its plan is adopted,
overall company net operating income should:
increase by $3,560
increase by $3,710
decrease by $3,835
decrease by $3,770
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