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A company operates two stores: Store 1 Sales $400,000 $600,000 Variable expenses 150.000 420.000 Contribution margin 240,000 180,000 Traceable fixed exp. 100,000 200.000 Segment margin

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A company operates two stores: Store 1 Sales $400,000 $600,000 Variable expenses 150.000 420.000 Contribution margin 240,000 180,000 Traceable fixed exp. 100,000 200.000 Segment margin 140,000 (20,000) Common fixed exp 20.000 30.000 50,000 Net operating income 120,000 (50,000) 70,000 The company is deciding whether or not to close Store 2. if Store 2 is closed, 1/4 of its traceable fixed expenses will continue, and will be allocated to Store 1 Closing Store 2 would also result in a 10% decrease in sales for Store 1 Compute the effect on the company's net operating income if they choose to close Store 2 Essay Toolbar naxation. BIVS Store 2 Company $1,000,000 580.000 420,000 300.000 120,000

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