area have led to declining foot traffic and sales in the LTH stores. Senior corporate executives have

been asking whether the chain should close those stores and focus on the stores in the Southern

Division. The most recent income statement for the Northern Division follows.

The CEO has asked for your thoughts on the decision to close the Northern Division stores. If the

Northern Division is eliminated and the stores closed, neither total corporate support costs nor

operations or costs of the Southern Division stores are expected to change.

Required:

a$.$ Using the worksheet below, determine which revenues and costs are probably differential or not

differential for the decision to close the Northern Division stores.

b$.$ What will be the effect on LTH$\text{'}$s income if the Northern Division stores are closed?

Complete this question by entering your answers in the tabs below.

Required $A$

Required B

Using the worksheet below, determine which revenues and costs are probably differential or not differential fc

close the Northern Division stores.

Note: Enter you answer in whole dollars, not in thousands e$.9.10,000$ should be entered as $10,000,000.$

Lessing Toy and Hobby

Northem Division Income Statement

Differential Revenues and Costs

For the Year Ending January $31$