Calculate the change in net income if the Town Store is closed and sales at the Mall Store increase by 20%. Do not use $ in your answer. TotalMallTownCompany$270,000 $80,000 $190,000StoreStoreSalesLess variable costs32,000 75,000107,000$163,000Contribution marginTraceable fixed expenses$48,000 $115,000Depreciation13,0006,0007,00085,000100,000$50,00045,000Cash items15,000Store segment marginCommon fixed. expenses.$27,000 $23,00045,000 45,000$12,000 ($7,000)Operating income$5,000

Variable cost means the cost which vary with the level of output where as fixed cost remain fixed…

Total Mall Town Company $270,000 $80,000 $190,000 Store Store Sales Less variable costs 107,000 32,000 75,000 Contribution margin Traceable fixed expenses $163,000 $48,000 $115,000 13,000 100,000 $50,000 45,000 Depreciation 6,000 7,000 Cash items 15,000 85,000 Store segment margin Common fixed expenses. $27,000 $23,000 45,000 45,000 $12,000 ($7,000) Operating income $5,000

Total Mall Town Company $270,000 $80,000 $190,000 Store Store Sales Less variable costs 107,000 32,000 75,000 Contribution margin Traceable fixed expenses $163,000 $48,000 $115,000 13,000 100,000 $50,000 45,000 Depreciation 6,000 7,000 Cash items 15,000 85,000 Store segment margin Common fixed expenses. $27,000 $23,000 45,000 45,000 $12,000 ($7,000) Operating income $5,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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