Fact Pattern:

Condensed monthly operating income data for Korbin, Inc., for May follows:

Urban

Store

Suburban

Store

Total

Sales

$$80,000$

$$120,000$

$$200,000$

Variable costs

$32,000$

$84,000$

$116,000$

Contribution margin

$$48,000$

$ $36,000$

$ $84,000$

Direct fixed costs

$20,000$

$40,000$

$60,000$

Store segment margin

$$28,000$

$ $(4,000)$

$ $24,000$

Common fixed cost

$4,000$

$6,000$

$10,000$

Operating income

$$24,000$

$ $(10,000)$

$ $14,000$

Additional information regarding Korbin$$s operations follows:

$$

One$-$fourth of each store$$s direct fixed costs would continue if either store is closed.

$$

Korbin allocates common fixed costs to each store on the basis of sales dollars.

$$

Management estimates that closing the Suburban Store would result in a $10\%$ decrease in the Urban Store$$s sales, while closing the Urban Store would not affect the Suburban Store$$s sales.

$$

The operating results for May are representative of all months.

Question

A decision by Korbin to close the Suburban Store would result in a monthly increase $($decrease$)$ in Korbin$$s operating income of

A$.$

$$(6,000)$

B$.$

$$(10,800)$

C$.$

$$4,000$

D$.$

$$(1,200)$