The most recent monthly income statement for Your Company Is given below: total store 1 store 2 Sales $2,100,000 $1,300,000 $800,000 VC $1,260,000 $882,000 $378,000 CM $840,000 $418,000 $422,000 Traceable fixed costs $420,000 $231,000 $189,000 Segment margin $420,000 $187,000 $233,000 Common fixed costs $350,000 $210,000 $140,000 $70,000 ($23,000) $93,000 NI Your Company is considering closing Store I. If Store I is closed, one-fourth of its traceable fixed expenses would continue to be incurred. Also, the closing of Store I would result in a 20% decrease in sales in Store II. Your Company allocates common fixed expenses on the basis of sales dollars and none of these costs would be saved if a store were shut down. What is the increase or (decrease) in the net income if Store I is closed? enter an increase as a positive number and a decrease as a negative number.
The most recent monthly income statement for Your Company Is given below: total store 1 store 2 Sales $2,100,000 $1,300,000 $800,000 VC $1,260,000 $882,000 $378,000 CM $840,000 $418,000 $422,000 Traceable fixed costs $420,000 $231,000 $189,000 Segment margin $420,000 $187,000 $233,000 Common fixed costs $350,000 $210,000 $140,000 $70,000 ($23,000) $93,000 NI Your Company is considering closing Store I. If Store I is closed, one-fourth of its traceable fixed expenses would continue to be incurred. Also, the closing of Store I would result in a 20% decrease in sales in Store II. Your Company allocates common fixed expenses on the basis of sales dollars and none of these costs would be saved if a store were shut down. What is the increase or (decrease) in the net income if Store I is closed? enter an increase as a positive number and a decrease as a negative number.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![The most recent monthly income statement for Your Company 1s given below:
total
store 1
store 2
Sales
$2,100,000
$1,300,000
$800,000
VC
$1,260,000
$882,000
$378,000
CM
$840,000
$418,000
$422,000
Traceable fixed costs
$420,000
$231,000
$189,000
Segment margin
$420,000
$187,000
$233,000
Common fixed costs
$350,000
$210,000
$140,000
$70,000
($23,000)
$93,000
NI
Your Company is considering closing Store I. If Store I is closed, one-fourth of its traceable fixed expenses would
continue to be incurred. Also, the closing of Store I would result in a 20% decrease in sales in Store II. Your
Company allocates common fixed expenses on the basis of sales dollars and none of these costs would be saved if a
store were shut down. What is the increase or (decrease) in the net income if Store I is closed? enter an increase as a
positive number and a decrease as a negative number.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F79550bd4-da87-49f4-b106-b3b27e45fe48%2F354339d1-09d2-4597-8ca1-2d49b672f5f5%2F5558sj3_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The most recent monthly income statement for Your Company 1s given below:
total
store 1
store 2
Sales
$2,100,000
$1,300,000
$800,000
VC
$1,260,000
$882,000
$378,000
CM
$840,000
$418,000
$422,000
Traceable fixed costs
$420,000
$231,000
$189,000
Segment margin
$420,000
$187,000
$233,000
Common fixed costs
$350,000
$210,000
$140,000
$70,000
($23,000)
$93,000
NI
Your Company is considering closing Store I. If Store I is closed, one-fourth of its traceable fixed expenses would
continue to be incurred. Also, the closing of Store I would result in a 20% decrease in sales in Store II. Your
Company allocates common fixed expenses on the basis of sales dollars and none of these costs would be saved if a
store were shut down. What is the increase or (decrease) in the net income if Store I is closed? enter an increase as a
positive number and a decrease as a negative number.
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