Question: Azuki Corporation operates in two sales territories, urban and rural. Shown below is last year's income statement segmented by territory:
|
|
Urban
|
Rural
|
|
Sales
|
$320,000
|
$80,000
|
|
Variable expenses
|
208,000
|
56,000
|
|
Contribution margin
|
112,000
|
24,000
|
|
Traceable fixed expenses
|
48,000
|
30,000
|
|
Segment margin
|
$64,000
|
$(6,000)
|
Azuki's common fixed expenses were 25,000 dollar last year. If urban sales were ten percent higher last year, by approximately how much would Azuki's net operating income have raised? [Suppose no change in the revenue or cost structure.]
[A] $4,400
[B] $6,400
[C] $11,200
[D] $32,000