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Annie's Homemade is deciding whether to retain or drop a 7 0 0 - square feet satellite shop location. The company makes the ice cream
Annie's Homemade is deciding whether to retain or drop a 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 satelite location Ingredient costs as a percent of sales
Monthly rent at satellite location the lease is cancelable
Average monthly utility expense at satellite location
Parttime store managers' combined annual wages at satellite location
Annual hourly wages paid to additional employees at satellite location
Annual hours spent by salaried managers at the main shop location supporting the satellite location other annual expenses:
Annual depreciation expense on satellite store's equipment no salvage value
Annual pickup truck and cargo trailer depreciation, insurance, registration, and vehicle tax
Annual manufacturing overhead at main shop location eg equipment depreciation, rent, utilities, insurance, etc.
$
The salaried managers working at the main shop will be retained whether the satellite store closes or remains open. The parttime store managers and additional hourly employees working at the satellite location would not be retained if it closes.
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