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The most recent monthly income statement for Greenie Stores is given below: Due to its poor showing, consideration is being given to closing Store B.
The most recent monthly income statement for Greenie Stores is given below:
Due to its poor showing, consideration is being given to closing Store B. Studies show that if Store B is closed, one-fifth (20%) of its traceable fixed expenses will remain unchanged. The studies also show that completing Store B would result in a 20 percent increase in sales in Store A. The company allocates everyday fixed expenses to the stores based on sales dollars.
- Compute the overall increase or decrease in the company's operating income if Store B is closed. Show your work!
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