O'Neill, Incorporated's Segmented Income Statement for the Most Recent Month

Multiple Choice

O'Neill, Incorporated's segmented income statement for the most recent month is given below. For each of the following questions, refer back to the above original data. Currently the sales clerks receive a salary of $7,000 per month in StoreB. A proposal has been made to change from a fixed salary to a sales commission of 5%. Assume that this proposal is adopted, and that as a result sales increase by $20,000. The new segment margin for Store B should be:

A) $29,000
B) $32,000
C) $45,000