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

North Division has the following information: $$\begin{array} { l r } \text { Sales } & \$ 1,200,000 \\\text { Variable expenses } & 640,000 \\\text { Fixed expenses } & 620,000\end{array}$$ 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) $60000 increase
B) $620000 decrease
C) $560000 decrease
D) $580000 increase

Correct Answer:

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