The Rial Company's income statement for June is given below:
-A proposal has been made that will lower variable expenses in Division L to 35% of sales.However,this reduction can only be accomplished by a $15,000 increase in Division L's traceable fixed expenses.If this proposal is implemented and if sales remain constant,overall company net operating income should:
A)increase by $15,000
B)increase by $24,000
C)decrease by $15,000
D)decrease by $6,000

Question

The Rial Company's income statement for June is given below:
-A proposal has been made that will lower variable expenses in Division L to 35% of sales.However,this reduction can only be accomplished by a $15,000 increase in Division L's traceable fixed expenses.If this proposal is implemented and if sales remain constant,overall company net operating income should:
A)increase by $15,000 
B)increase by $24,000 
C)decrease by $15,000 
D)decrease by $6,000

Quizplus · Accepted Answer

The Answer of The Rial Company's income statement for June is given below:
-A proposal has been made that will lower variable expenses in Division L to 35% of sales.However,this reduction can only be accomplished by a $15,000 increase in Division L's traceable fixed expenses.If this proposal is implemented and if sales remain constant,overall company net operating income should:
A)increase by $15,000 
B)increase by $24,000 
C)decrease by $15,000 
D)decrease by $6,000

The Rial Company's Income Statement for June Is Given Below