Annie's Homemade is deciding whether to retain or drop a 700-square feet satellite shop location. The company makes the ice cream sold at the satellite location at its larger main shop location. Twice a month the company transports ice cream from its main shop to the satellite location. The company gathered the following additional information to assist in making the decision:

Annual sales at the satellite location	$ 130,000
Ingredient costs as a percent of sales	30%
Monthly rent at satellite location (the lease is cancelable)	$ 2,200
Average monthly utility expense at satellite location	$ 200
Part-time store managers combined annual wages at satellite location	$ 36,000
Annual hourly wages paid to additional employees at satellite location	$ 32,000
Annual hours spent by salaried managers at the main shop location supporting the satellite location	600
Other annual expenses:
Annual depreciation expense on satellite stores equipment (no salvage value)	$ 5,000
Annual pickup truck and cargo trailer depreciation, insurance, registration, and vehicle tax	$ 16,000
Annual manufacturing overhead at main shop location (e.g., equipment depreciation, rent, utilities, insurance, etc.)	$ 55,000

The salaried managers working at the main shop will be retained whether the satellite store closes or remains open. The part-time store managers and additional hourly employees working at the satellite location would not be retained if it closes.

Required:

1. What is the financial advantage (disadvantage) of closing the satellite shop location (on an annual basis)?