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North Division Has the Following Information  Sales $1,200,000 Variable expenses 640,000 Fixed expenses 620,000\begin{array} { l r } \text { Sales } & \$ 1,200,000 \\\text { Variable expenses } & 640,000 \\\text { Fixed expenses } & 620,000\end{array}

Question 112

Multiple Choice

North Division has the following information:  Sales $1,200,000 Variable expenses 640,000 Fixed expenses 620,000\begin{array} { l r } \text { Sales } & \$ 1,200,000 \\\text { Variable expenses } & 640,000 \\\text { Fixed expenses } & 620,000\end{array} If this division is eliminated, the fixed expenses will be allocated to the company's other divisions. What is the incremental effect on net income if the division is dropped?


A) $60,000 increase
B) $620,000 decrease
C) $560,000 decrease
D) $580,000 increase

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