Question: (Not a repeat question.) Condensed monthly operating income data for Korbin Inc. for May follow: Urban Suburban Total Store Store Sales $80,000 $120,000 $200,000 Variable

(Not a repeat question.) Condensed monthly
(Not a repeat question.) Condensed monthly operating income data for Korbin Inc. for May follow: Urban Suburban Total Store Store 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 $28,000 S (4.000) $24,000 margin Common 4,000 6,000 10,000 fixed cost Operating income $24,000 $(10,000) $14,000 Additional information regarding Korbin's operations follows: One-fourth of each store's direct fixed costs will continue if either store is closed. Korbin allocates common fixed costs to each store on the basis of sales dollars. Management estimates that closing Suburban Store would result in a 10% decrease in Urban Store's sales, whereas closing Urban Store would not affect Suburban Store's sales. The operating results for May are representative of all months. Korbin is considering a promotional campaign at Suburban Store that would not affect Urban Store. Increasing monthly promotional expense at Suburban Store by $4.000 in order to increase this store's sales by 15% would result in a monthly increase (decrease) in Korbin's operating income during May (rounded) of: $12,600) $1,400. $5,400 $14,000

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