Condensed monthly income data for Thurber Book Stores are presented in the following table for November 20x1. (Ignore income taxes.)

	Mall Store						Downtown Store						Total
Sales		$	257,000					$	394,000				$	651,000
Less: Variable expenses			102,800						272,400					375,200
Contribution margin		$	154,200					$	121,600				$	275,800
Less: Fixed expenses			65,100						137,000					202,100
Operating income		$	89,100					$	(15,400	)			$	73,700

Additional Information:

• Management estimates that closing the downtown store would result in a 10 percent decrease in mall store sales, while closing the mall store would not affect downtown store sales.
• One-fourth of each stores fixed expenses would continue through December 31, 20x2, if either store were closed.
• The operating results for November 20x1 are representative of all months.

Required: 1. Calculate the increase or decrease in Thurbers monthly operating income during 20x2 if the downtown store is closed. 2. The management of Thurber Book Stores is considering a promotional campaign at the downtown store that would not affect the mall store. Annual promotional expenses at the downtown store would be increased by $197,000 in order to increase downtown store sales by 10 percent. What would be the effect of this promotional campaign on the companys monthly operating income during 20x2? 3. One-half of the downtown stores dollar sales are from items sold at their variable cost to attract customers to the store. Thurbers management is considering the deletion of these items, a move that would reduce the downtown stores direct fixed expenses by 15 percent and result in the loss of 20 percent of the remaining downtown stores sales volume. This change would not affect the mall store. What would be the effect on Thurbers monthly operating income if the items sold at their variable cost are eliminated?

Calculate the increase or decrease in Thurbers monthly operating income during 20x2 if the downtown store is closed.

Total

in operating income

The management of Thurber Book Stores is considering a promotional campaign at the downtown store that would not affect the mall store. Annual promotional expenses at the downtown store would be increased by $197,000 in order to increase downtown store sales by 10 percent. What would be the effect of this promotional campaign on the companys monthly operating income during 20x2? (Round your final answer to the nearest whole dollar.)

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Total

in operating income

One-half of the downtown stores dollar sales are from items sold at their variable cost to attract customers to the store. Thurbers management is considering the deletion of these items, a move that would reduce the downtown stores direct fixed expenses by 15 percent and result in the loss of 20 percent of the remaining downtown stores sales volume. This change would not affect the mall store. What would be the effect on Thurbers monthly operating income if the items sold at their variable cost are eliminated?

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Total

in operating income