2-Close or Retain a Store Suponor Marcats, Inc., opera:es three scores na srce metropolitan area. A segmented absorption costing income statemen: of the company for the last quarter is given below: Supenor Markets, Inc Income Sledernent For the Quarter Ended June 30 North Total District 3,000,000 $720,000 1.657,200 408.200 South District 11.200,000 660,000 Fast District 51,000,000 694,000 Sales Cost of codo cid 1 342.800 316,800 540,000 486,000 Gross margin Experses Selling expenses Adrnir siralive B17,000 383,000 231,400 106,000 315.000 150,900 270,500 128,100 Total experises 1.200,000 337,400 485,900 396,700 Not income (oss) $142,800 $ (20.600) $74.100 $99,300 The store located nthe North District has cors stently stown Isses over the past two years. For this reason, management is considering to closed the store. The company has asked you to make a recommendation as to whether the store should be Cose or keut upen. The fullwiny adulural information is available fur your use The breakdown of the seling and sdministrative expenses s as follows: Seling Sales salanes Dinsan verlang General advertising" Stoneren Depreciation Store Fixtures Delivery equipment Delivery salaries Tuila $239,000 197 000 45,000 300,000 Nurih $70,000 61 300 10,300 $5,000 South $89,000 72,000 18,000 120,000 Fa $80,000 84.000 16,200 96.000 8,000 18,000 9.000 21,000 4 800 3,000 3,000 5.400 3,000 7,000 co 7,000 Total Selling expenses 5817000 $231 400 $315,000 3270.000 Administrativo Sluty manyent arus General office salarios Ingurumu un linurus and inventury Utilties Emily General office - other Tota $70,000 50,000 26,000 106,000 67 000 75,000 North $21,000 12,000 7,500 31,000 18 500 18,000 South $30,000 20,000 9,000 40,000 21,900 30,000 East $19,000 18,000 8,500 35,000 12 400 27,000 5383,000 $100.000 S150 ECO $120.100 Total administratie Allocated on the basis of sales dollars The lease of the buildrg housing the North store can be troke with ra penalty The fixtures teng uced in the North store woud betrarstomed to the cher two stores if the North or were dosed d. The general manager of the North store would be retained and transferred to ano-her position in the company of the Nortt store were closed. She would be filing a position that would otherwise be filled by hiring a new employee at a salary of $11,000 per quarter. The general menager of the Norh store wcud be retained at net normal salary of $12,000 per quarter All other employees in the store woud be discharged e The company has one delivery crew that serves all three stones One delivery person could be discharged if the North store were coses. This person's salary is $4,000 per quarter. The de ivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsclete. | The company's employment taxes are 15% ul salaries 9. One-third of the insurance in the North store s on the store's fixtures The Ganera 11:e Salaries and General or ce-oner relate to the overall management of Superior arvets Inc. If The North Shore were closed one pcrson in the general office could be discharged because of the decrease in overall workload. This person's compensation is 6.000 per quarter Recules: 1. Prepare a schedule show ng the change in revenues and experses and the impact on the company's overal net operating income that would result the North stora were closed 2. Accuming that the store can't be cublessed, what rccommendation would you make to the management of Superior Markets, c.? 3. Disregard requirement 2. Assume that if the North Store nere doset at least one-fourth of its sales would tansfer to the East store due to strong customer oyalty to Superior Markets. The East store has enough capacity to handle the increased saics You may axume that the increased sees in the East store would yield the same grocs margin as 3 percantage of sales & presant sales in that store. What effect would these factors have on your recommendation concerning the Northstore? 4. Show all computations to suppor your answer 2-Close or Retain a Store Suponor Marcats, Inc., opera:es three scores na srce metropolitan area. A segmented absorption costing income statemen: of the company for the last quarter is given below: Supenor Markets, Inc Income Sledernent For the Quarter Ended June 30 North Total District 3,000,000 $720,000 1.657,200 408.200 South District 11.200,000 660,000 Fast District 51,000,000 694,000 Sales Cost of codo cid 1 342.800 316,800 540,000 486,000 Gross margin Experses Selling expenses Adrnir siralive B17,000 383,000 231,400 106,000 315.000 150,900 270,500 128,100 Total experises 1.200,000 337,400 485,900 396,700 Not income (oss) $142,800 $ (20.600) $74.100 $99,300 The store located nthe North District has cors stently stown Isses over the past two years. For this reason, management is considering to closed the store. The company has asked you to make a recommendation as to whether the store should be Cose or keut upen. The fullwiny adulural information is available fur your use The breakdown of the seling and sdministrative expenses s as follows: Seling Sales salanes Dinsan verlang General advertising" Stoneren Depreciation Store Fixtures Delivery equipment Delivery salaries Tuila $239,000 197 000 45,000 300,000 Nurih $70,000 61 300 10,300 $5,000 South $89,000 72,000 18,000 120,000 Fa $80,000 84.000 16,200 96.000 8,000 18,000 9.000 21,000 4 800 3,000 3,000 5.400 3,000 7,000 co 7,000 Total Selling expenses 5817000 $231 400 $315,000 3270.000 Administrativo Sluty manyent arus General office salarios Ingurumu un linurus and inventury Utilties Emily General office - other Tota $70,000 50,000 26,000 106,000 67 000 75,000 North $21,000 12,000 7,500 31,000 18 500 18,000 South $30,000 20,000 9,000 40,000 21,900 30,000 East $19,000 18,000 8,500 35,000 12 400 27,000 5383,000 $100.000 S150 ECO $120.100 Total administratie Allocated on the basis of sales dollars The lease of the buildrg housing the North store can be troke with ra penalty The fixtures teng uced in the North store woud betrarstomed to the cher two stores if the North or were dosed d. The general manager of the North store would be retained and transferred to ano-her position in the company of the Nortt store were closed. She would be filing a position that would otherwise be filled by hiring a new employee at a salary of $11,000 per quarter. The general menager of the Norh store wcud be retained at net normal salary of $12,000 per quarter All other employees in the store woud be discharged e The company has one delivery crew that serves all three stones One delivery person could be discharged if the North store were coses. This person's salary is $4,000 per quarter. The de ivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsclete. | The company's employment taxes are 15% ul salaries 9. One-third of the insurance in the North store s on the store's fixtures The Ganera 11:e Salaries and General or ce-oner relate to the overall management of Superior arvets Inc. If The North Shore were closed one pcrson in the general office could be discharged because of the decrease in overall workload. This person's compensation is 6.000 per quarter Recules: 1. Prepare a schedule show ng the change in revenues and experses and the impact on the company's overal net operating income that would result the North stora were closed 2. Accuming that the store can't be cublessed, what rccommendation would you make to the management of Superior Markets, c.? 3. Disregard requirement 2. Assume that if the North Store nere doset at least one-fourth of its sales would tansfer to the East store due to strong customer oyalty to Superior Markets. The East store has enough capacity to handle the increased saics You may axume that the increased sees in the East store would yield the same grocs margin as 3 percantage of sales & presant sales in that store. What effect would these factors have on your recommendation concerning the Northstore? 4. Show all computations to suppor your