Making a decision to close or continue to operate a store. A new accountant at the Faulkner Company has made an analysis of the profitability of each of the company’s 20 stores. The following data relate to Store 6:

The accountant suggests that the store should be closed.

a. Do you agree or disagree?

b. What additional information would be helpful in making this decision?

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Sales for year Cost of goods sold Gross profit on sales Direct expenses incurred in store $1,200,000 840,000 $ 360,000 338,000 Contribution of store $ 22,000 Indirect expenses: General and administrative $ 30,000 Interest 8,000 Total indirect expenses $ 38,000 Net loss for year $ (16,000)