The most recent monthly income statement for Kennaman Stores is given below:

Kennaman is considering closing Store I. If Store I is closed, one-fourth of its traceable fixed expenses would continue unchanged. Also, the closing of Store I would result in a 20% decrease in sales in Store II. (The decrease in sales would be the result of selling less units in store II, not due to reduced selling prices. In addition to sales, what other elements in the budget will be affected?) Kennaman allocates common fixed expenses on the basis of sales dollars.
Compute the overall increase or decrease in Kennaman's net operating income if Store I is closed

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Total Store I Store II Sales Less variable expenses Contribution margin Less traceable fixed expenses Segment margin Less common fixed expenses Net operating income S 2,000,000 1,200,000 800,000 400,000 400,000 300,000 100,000 S1,200,000 840,000 360,000 220,000 140,000 180,000 S (40,000) $800,000 360,000 440,000 180,000 260,000 120,000 S140,000