A company operates two stores: 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. Sales Store 1 $400,000 Store 2 Company $600,000 $1,000,000 Variable expenses 160,000 420,000 580,000 Contribution margin 240,000 180,000 420,000 Traceable fixed exp. 100,000 200,000 300,000 Segment margin 140,000 (20,000) 120,000 Common fixed exp. 20,000 30,000 Net operating income 120,000 (50,000) 50,000 70,000 Essay Toolbar navigation B I USE A