solve

Problem B. Noncop Company operates two stores - one In Legazpi and another In Daraga. The operating results for October 2018, which are representatives of all months, are condensed as follows: Legazpi Store Derege Store Total P 400 000 P 600 000 P1,000 000 Veriable Cost 160,000 420,000 580,000 Contribution margin Direct fixed cout 100,000 200 000 300 000 Store Margin P140,000 [P 201000) P 120,000 Indirect fored coat, Blocated bayed on peco Boley 20,000 30 000 501000 Operating Income P120,000 [P50,000) P 70,000 Additional Information: 1) Thirty percent (30%%) of each store's direct cost cannot be eliminated even if either store is closed 2) If Daraga Store is closed, the Legazpi Store's sales would decrease by 20%% However, closing the Legazpi Store would not affect the Deraga Store's sales Required: 1. If the objective is to maximize total company profit, which store should be closed? 2. If the Deraga Store is closed, the company's total income would increase (decrease) by how much? 3. Assume that a present, half of the Derage Store's sales are from items sold at variable cost to attract customers. Noncop is considering to stop selling such items. This action would reduce the remaining sales by 20%% and the direct cost to 85%% These changes will not affect Legazpi Store. This decision to eliminate the items sold at variable cost would result in a monthly increase (decrease) in its operating income by how much? 4. Assume that the company is considering a promotional campaign for the whole company which will: a) increase sales in both stores by 20%%; bj double the total indirect fored cost What is the effect of this promotional campaign to the company's operating income