Problem 3 - Discontinuing a Segment or Product: Livonia store Canton store Total Sales revenue Variable expenses Contribution margin Direct fixed expenses Common fixed expenses Total fixed expenses 2100 Operating income 24,000 $ 80,000 120,000 84,000 36,000 40,000 6,000 32,000 48,000 20,000 ,000 24,000 $ 200,000 116,000 84,000 60,000 10,000 70,000 46,000 o La George's Donuts Store Co., operates two stores. One on Haggerty Rd. in Livonia, and the other on Ford Rd. in Canton. Results for the month of May, which is representative of all months, are as follows: The following information pertains to La George's Donuts Store Co.: One-fourth of each store's direct fixed expense would continue if either store was closed La George's Donuts Store Co. allocates common fixed expenses to each location on the basis of sales dollars Management estimates that closing the store in Canton would result in a 10% decrease in the Livonia store's sales, while closing the Livonia store would have no effect on the Canton store's sales. Required: a. Management believes that the Canton store should be