Question: can someone help me get the correct answer. i am really struggling The most recent monthly income statement for Benner Stores is given below: Store
The most recent monthly income statement for Benner Stores is given below: Store B $600,000 280,000 320,000 280,000 40,000 130,000 ($90,000) Store A $400,000 160,000 240,000 100,000 140,000 90,000 $50,000 Total $1,000,000 440,000 560,000 Sales Variable expense Contribution margin Traceable fixed expense 380,000 Store segment margin 180,000 Common fixed expenses 220,000 Net operating income ($40,000) Due to its poor showing, consideration is being given to closing store B. Studies show that is Store B is closed, one-fourth of its traceable fixed expenses will continue unchanged. The studies also show that closing Store B would result in a 10 percent increase in sales in Store A. The company allocates common fixed expenses to the stores on the basis of sales dollars. However, 30% of the common fixed costs can be eliminated if store B closes. 1. Determine the monthly financial advantage (disadvantage) of closing Store B. 2. What would be your recommendation to Benner's management? 3. If the one-fourth of Store B's traceable fixed expenses that remain unchanged are its lease payments, when would you want to reconsider your recommendation from question 2? Why? Show numbers
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