The most recent monthly income statement for Kennaman Stores is given below:
Kennaman is considering closing Store I.If Store I is closed,one-fourth of its traceable fixed expenses would continue unchanged.Also,the closing of Store I would result in a 20% decrease in sales in Store II.Kennaman allocates common fixed expenses on the basis of sales dollars.
Required:
Compute the overall increase or decrease in Kennaman's net operating income if Store I is closed.
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