Senior management has devised a plan to increase sales by 15% in the next three quarters which was successfully implemented and executed. Given the assumptions that the organization is operating within the relevant range and the linearity assumption hold true regarding the behavior of costs as well as the selling price remaining constant with no discretionary increases in fixed costs, how does it explain lower net operating income with higher sales? (20 pts)

B) Please explain and discuss the financial statement impact of the overhead application process, including the affected accounts.