Pong Incorporated\'s segmented income statement for the most recent month is giv
ID: 2490490 • Letter: P
Question
Pong Incorporated's segmented income statement for the most recent month is given below Total Store A Store B Sales Variable expenses 51,546 26,746 24,800 Contribution margin Traceable fixed expenses 109,854 72,400 35,454 22,400 74,400 50,000 37,454 $13,054 $24,400 Segment margin Common fixed expenses 15,700 Net operating income 21,754 If Store B sales increase by $48,100 with no change in fixed expenses, the overall company net operating income should increase by $4,810 O increase by $36,075 O increase by $32,227 O increase by $9,620Explanation / Answer
Store B Sales 99200 Variable Expenses 24800 Varable Ratio 24800*100/99200 25 Increase in Sales 48100 increase in expenses 12025 Margin 36075 The correct answer is B. increase by $ 36075 2 Store A Sales 69000 Variable Expenses 29670 Varable Ratio 29670*100/69000 43 Increase in Sales 16300 increase in expenses 7009 Margin 9291 Less: Fixed Cost 8500 . Increase in Net Operating Income 791 C. Increase by $ 791 4 Total Fixed Expenses Contribution 2100000 Less: Net Income -490000 Fixed Expenses 1610000 C. $ 1610000