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The most recent monthly income statement for Acme Corp. is given below: store 1 store 2 total sales $625,000 $930,000 $1,555.000 variable expenses 210,000 560,000

The most recent monthly income statement for Acme Corp. is given below:

store 1 store 2 total
sales $625,000 $930,000 $1,555.000
variable expenses 210,000 560,000 770,000
contribution margin 415,000 370,000 785,000
traceable fixed expenses 120,000 425,000 545,000
store segment margin 295,000 (55,000) 240,000
common fixed expenses 65,000 75,000 140,000
net operating income 230,000 $(130,000) $100,000

Due to its poor showing, consideration is being given to closing Store 2. Studies show that if Store 2 is closed, 43 percet of its traceable fixed expenses will continue unchanged. The studies alo show that closing Store 2 would result in a 2 percent decrease in sales in Store 1. The company allocates common fixed expenses to the store on the basis of sales dollars.

Compute the overall increase or decrease in the company's operating income if Store 2 is closed.

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