Hancock Company Manufactures and Sells Two Lines of Furniture,case Goods

Multiple Choice

Hancock Company manufactures and sells two lines of furniture,case goods and upholstery.During the most recent accounting period,the Case Goods and Upholstery Divisions sold 15,000 and 2,000 units,respectively.The company's most recent financial statements are shown below: (Do not round intermediate calculations.) $\begin{array}{lrrr}&\text { Case Goods}&\text { Upholstery }\\\text {Sales}&\$1,600,000&\$400,000\\\text {Less cost of goods sold:}\\\text { Unit-level production cost } & 1,000,000 & 240,000 \\\text { Depreciation, production equipment } & \underline{ 240,000 }& \underline{60,000} \\\text { Gross margin } & \$ 360,000 & \$ 100,000\\\text { Less operating expenses: }\\\text {Unit-level selling and administrative costs }&60,000&50,000\\\text {Corporate-level facility expenses (fixed) }& \underline{52,000}& \underline{52,000}\\ \text {Net income (loss) }& \underline{\$248,000}& \underline{\$(2,000) }\end{array}$
If unit sales for both divisions increased 10%,the company would report which of the following?

A) A $52,000 increase in net income for the Upholstery Division
B) A 10% increase in total net income of the company
C) A decline in profit for the Upholstery Division.
D) A net income for the Upholstery Division of $9,000