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5. The most recent monthly income statement for the Firm, Inc. is given below. Total Store Store Sales $2,100,000 $1,300,000 $800,000 Variable expenses 1.250,000_882,000 378,000

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5. The most recent monthly income statement for the Firm, Inc. is given below. Total Store Store Sales $2,100,000 $1,300,000 $800,000 Variable expenses 1.250,000_882,000 378,000 Contribution margin 840,000 418,000 422,000 Traceable fixed expenses 420,000 231,000 189.000 Segment margin 420,000 187,000 233,000 Common fixed expenses _350,000_210,000 140,000 Net operating income $70,000 ($23,000) $93.000 Firm, Inc. is considering closing Store L. If Store I is closed, one-fourth of its traceable fixed expenses would continue. Also, the closing of Store I would result in a 25% decrease in sales in Store II. Firm, Inc. allocates common fixed expenses on the basis of sales dollars and none of these costs would be saved if a store were shut down. of Store A is closed, the net operating income of Firm, Inc. would: a) $350,250 decrease b) $275,750 decrease c) $341,350 decrease d) $502,750 decrease e) $173,250 increase

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