6 3 Superior Markets, Incorporated, operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below. Superior Markets, Incorporated Income Statement Total points 021810 Sales Cost of goods sold Gross margin Skipped Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income (loss) Book Print For the Quarter Ended September 30 North Store $ 3,540,000 $ 849,600 South Store $ 1,416,000 1,955,496 475,776 778,800 East Store $ 1,274,400 700,920 1,584,504 373,824 637,200 573,400 964,060 273,052 371,700 319,308 451.940 125,000 178,062 148,798 1,416,000 398,132 549,762 468,106 5168,504 $ (24,308) $87,438 $ 105,374 The North Store has consistently shown losses over the past two years. For this reason, management is giving consideration to closing the store. The company has asked you to make a recommendation as to whether the store should be closed or kept open. The following additional information is available for your use References a. The breakdown of the selling and administrative expenses that are shown above is as follows: Total North Store South Store East Store Selling expensest $94,400 $282,020 220,660 53,100 $ 82,600 60,180 12,744 $ 105,020 84,960 21,240 Sales salaries Direct advertising General advertising Store rent Depreciation of store fixtures Delivery salaries Depreciation of delivery equipment Total selling expenses "Allocated on the basis of sales dollars: 5 964,060 75,520 19,116 354,000 100,300 141,600 112,100 18,880) 5,428 7,080 6,372 24,780 8,260 8,260 8,260 10,620 3,540 3,540 3,540 $273,052 $371,700 $319,300