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Northern Stores is a retailer in the upper Midwest. The most recent monthly income statement for Northern Stores is given below: Total Store I Store

Northern Stores is a retailer in the upper Midwest. The most recent monthly income statement for Northern Stores is given below: Total Store I Store II Sales $2,100,000 $1,300,000 $800,000 Less variable expenses 1,300,000 942,000 358,000 Contribution margin 800,000 358,000 442,000 Less traceable fixed expenses 300,000 111,000 189,000 Segment margin 500,000 247,000 253,000 Less common fixed expenses 500,000 250,000 250,000 Net income (loss) $0 ($3,000) $3,000 Northern is considering closing Store I. If Store I closed, one-half of its traceable fixed expenses would continue to be incurred. Also, the closing of Store I would result in a 10% decrease in contribution margin in Store II. Northern allocates common fixed expenses based on 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 net income of Northern Stores if Store I closed

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