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Northern Stores is a retailer in British Columbia. The most recent monthly income statement for Northern Stores is given below: Total Store 1 Store II

Northern Stores is a retailer in British Columbia. The most recent monthly income statement for Northern Stores is given below: Total Store 1 Store II Sales $2,100,000 $1,300,000 $800,000 Less variable expense 1,260,000 882,000 378,000 Contribution margin $ 840,000 $ 418,000 $ 422,000 Less traceable fixed expense 420,000 231,000 189,000 Segment margin $ 420,000 $ 187,000 $ 233,000 Less common fixed expenses 350,000 210,000 140,000 Operating Income $ 70,000 $ (23,000) $ 93,000 Northern is considering closing Store I. If Store I is closed, one-fourth of its traceable fixed expenses would continue to be incurred. Also, the closing of Store I would result in a 20% decrease in sales in Store II. Northern allocates common fixed expenses on the basis of sales dollars and none of these costs would be saved if a store were shut down. Required: Compute the overall increase or decrease in the operating income of Northern Stores if Store I is closed

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