1. If the objective is to maximize total company profit, which store should be closed?

2. If the Samar store is closed, the companys total income would increase (decrease) by

__________.

3. In order to improve the profitability of the Samar store, the company is considering a promotional

campaign that would not affect the Leyte store. The campaign would cost P300,000 annually, and

it is expected to increase the Leyte stores sales by 20%. The promotional campaign would result

in a monthly increase (decrease) in the SANTO companys operating income of ______________. Please include solution. Thank you :)

SANTO Company has two prominent stores in Visayas - one in Leyte and another in Samar. The operating results for November 2019, which are representatives of all months, are condensed as follows: Leyte Store Samar Store Total Sales P400,000 P600,000 P1,000,000 Variable costs 160,000 420,000 580,000 Contribution margin 240,000 180,000 420,000 Direct fixed costs 100,000 200,000 300,000 Store margin 140,000 (20,000) 120,000 Indirect fixed costs, allocated based on Peso sales 20,000 30,000 50,000 Operating income P120,000 (P 50,000) P 70,000 Additional information: a. Thirty percent (30%) of each store's fixed costs cannot be eliminated even if either store is closed. b. If the Samar store is closed, the Leyte store's sales would decrease by 20%. However, closing the Leyte store would not affect the Samar store's sales. 1. If the objective is to maximize total company profit, which store should be closed? 2. If the Samar store is closed, the company's total income would increase (decrease) by 3. In order to improve the profitability of the Samar store, the company is considering a promotional campaign that would not affect the Leyte store. The campaign would cost P300,000 annually, and it is expected to increase the Leyte store's sales by 20%. The promotional campaign would result in a monthly increase (decrease) in the SANTO company's operating income of