1. Computer Departmen - The vacated space will be remodeled and will be devoted to an expanded line of Computer. Sales of computer are expected to increase by $68,000, and the Computer line's overall variable cost will drop by $3,000 due to more discounts offered by suppliers for larger orders. Due to more computers will be displayed in the store, an increase of $1 ,100 electricity charges per month is expected. 2. Audio Department If this department is dropped, Conrad can only cut Audio's xed costs by $10,100. All staff in this line will be laid off. Conrad will lose its exclusive rights to sell 12 brand name audio product lines in Canada. 3. Home Theatre Department - Customers who purchased Audio products often bought Home Theatre equipment. Sales of Home Theatre equipment are expected to fall by 25%. 4. The firm will increase monthly advertising expenditures by $6,100 and $3,200 to promote the Computer and Home Theatre Department respectively. The change in use of the retail building will trigger an increase in monthly insurance premium by $220 for each of the Computer and Home Theatre department