1.) Jackman's Grocery Store is a medium sized grocery in a large city. Mary Storm, the owner, is contemplating the addition of a department to sell either hardware or beer. She has talked to owners' of several similar stores and has reached the following conclusions. a) A hardware department would generate sales of $320,000 per year with a gross profit of 60%. No other variable costs would be added. Fixed costs added would be $84,000. Sales of groceries would increase 5% because of increased traffic through the store. b) A beer and wine department would generate sales of $480,000 per year with a gross profit of 80%. No other variable costs would be added, and additional fixed costs would be $144,000. Sales of groceries would increase by 8%. The income statement for a typical year for grocery sales alone is as follows: Sales $4,800,000 Cost of Sales 1,920,000 Gross Profit 2,880,000 Other Variable costs 960,000 Fixed Costs 1,120,000 Income $ 800.000 Compute the effects on income of adding each department. Which department should be added and why