(10 points) Blackwell is deciding whether or not to close a store that has negative operating...

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(10 points) Blackwell is deciding whether or not to close a store that has negative operating income. Revenues Sackatoon Division Regina Division Total 500,000.00 312,500.00 $12,500.00 Operating Costs Cost of Goods Sold 350,000.00 225,000.00 575,000.00 Lease 42,500.00 45,000.00 87,500.00 Hourly Labour Costs 21,000.00 20,000.00 41,000.00 Equipment Amortization 17,500.00 20,000.00 37,500.00 Allocated Corporate Overhead 20,000.00 22,500.00 42,500.00 Total Operating Costs 451,000.00 332,500.00 783,500.00 Operating Income 49,000.00 -20,000.00 29,000.00 -Regina lease has one year left on it. Building owner agrees Notes: to 50% reduction -Equipment in Regina Division has a salvage value equal to annual depreciation charge. -Corporate Overhead will decrease by $17,500 if Regina Division is closed Required Should the Regina Division be closed? Why? (10 points) Blackwell is deciding whether or not to close a store that has negative operating income. Revenues Sackatoon Division Regina Division Total 500,000.00 312,500.00 $12,500.00 Operating Costs Cost of Goods Sold 350,000.00 225,000.00 575,000.00 Lease 42,500.00 45,000.00 87,500.00 Hourly Labour Costs 21,000.00 20,000.00 41,000.00 Equipment Amortization 17,500.00 20,000.00 37,500.00 Allocated Corporate Overhead 20,000.00 22,500.00 42,500.00 Total Operating Costs 451,000.00 332,500.00 783,500.00 Operating Income 49,000.00 -20,000.00 29,000.00 -Regina lease has one year left on it. Building owner agrees Notes: to 50% reduction -Equipment in Regina Division has a salvage value equal to annual depreciation charge. -Corporate Overhead will decrease by $17,500 if Regina Division is closed Required Should the Regina Division be closed? Why?