Pong Incorporated\'s segmented income statement for the most recent month is giv
ID: 2469954 • Letter: P
Question
Pong Incorporated's segmented income statement for the most recent month is given below. Total Store A Store B Sales $159,300 $64,800 $94,500 Variable expenses 58,509 31,104 27,405 Contribution margin 100,791 33,696 67,095 Traceable fixed expenses 69,700 22,800 46,900 Segment margin 31,091 $10,896 $20,195 Common fixed expenses 23,300 Net operating income $ 7,791 If Store B sales increase by $46,000 with no change in fixed expenses, the overall company net operating income should: increase by $28,520 increase by $32,660 increase by $9,200 increase by $4,600
Explanation / Answer
CALCULATION OF INCREASE IN TOTLA NET OPERATING INCOME OF A COMPANY IF SALES OF STORE B INCREASED BY $46,000
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TOTAL STORE A STORE B
Sales 205,300 64,800 140,500
Variable Expenses 71,849 31,104 40,745
Contribution Margin 133,451 33,696 99,755
Traceable fixed expenses 69,700 22,800 46,900
Contribution 100,791 33,696 67,095
Traceable fixed expenses 69,700 22,800 46,900
Net Operating Income 7791 10,896 20,195