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Ridley and Scott Mercantile operates two stores, one on Maple Avenue and the other on Fenner Road. Results for the month of May, which is
Ridley and Scott Mercantile operates two stores, one on Maple Avenue and the other on Fenner Road. Results for the month of May, which is representative of all months, are as follows: The following information pertains to Ridley and Scott's operations. One-fourth of each store's direct fixed expenses would continue if either store were closed. Ridley and Scott allocates common fixed expenses to each store on the basis of sales dollars. Management estimates that closing the Fenner Road store would result in a 10% decrease in the Maple Avenue store's sales, while closing the Maple Avenue store would have no effect on the Fenner Road store's sales. Calculate the operating income if the Fenner Road store is closed
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