Gopher Gulch Corp. is a little two-store retailer operating in a local market.Its problem is that one store in the company is losing money while the other one is making money, based on company financial reports, causing the company as a whole to lose money. The most recent income statement for Gopher Gulch Corp. is given below:

Store 1Store 2Total

Sales$976,000$1,145,000$2,121,000

Variable costs(593,000)(685,000)(1,278,000)

Contribution margin383,000460,000843,000

Traceable fixed costs(470,000)(269,000)(739,000)

Store segment margin( 87,000)191,000104,000

Common fixed costs(116,000)(85,000)(201,000)

Net operating income (loss)$(203,000)$106,000$ (97,000)

Because of its poor showing, Gopher Gulch Corp. officials are considering closing Store 1. However, management and the workers at Store 1 say, "Not so fast!"A study by a consultant hired by Gopher Gulch Corp. officials show that if Store 1 is closed, 39 percent of its traceable fixed costs will continue unchanged. The study also shows that closing Store 1 would result in a 28 percent decrease in sales in Store 2. The company allocates common fixed costs, such as your corporate officials' salaries and advertising costs, to the stores on the basis of square footage of the stores. Management and workers at Store 1 claim that Store 1 is being unfairly targeted for closure.

Your uncle, the CEO of Gopher Gulch Corp., knows that you are a student in the prestigious Delta State University Integrated Master of Business Administration (IMBA) Program, and so has turned to you for advice on what to do.

Compare the total net income (loss) when the two stores are open with the total net operating income (loss) when only Store 2 is open. Is the total net operating income greater (total net operating loss smaller) when two stores are open or when only Store 2 is open?