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Superior Markets, incorporated, ope in a large metrogolitan area. A segmented absorption costing income statement for the company for the last quarter is an a belowi The North Store has consistently shown losses over the post two years. For this reason, manegement is glving 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 folowing additional information is avaliable for your use: a. The breakdown of the selling and administrative expenses that are shewn above is as follows: b. The lease on the building housing the North 5 tore can be broken with no penally. c. The fatures being used in the North Store would be transferred to the ofher two stores if the North Stere were closed. d. The general manaper of the North Store would be retained and transferred to another position in the company if the North Store were closed, She would be filling a position that would otherwise be filled by hiring o new employee at a salary of 511,440 per quarter. The general manager of the North Store would continue to eari her normal salary of \$12,480 per quarter, Alt other managers and empioyees in the North store would be discharged. e. The company has one delivery crew that serves all three stores. One delivery person could be discharged if the North 5 tore were closed. This person's salary is $4.160 per quarter. The delivery equipment would be distributed to the other stoses. The equipment does not wear out through use, but does eventually become obsolete. t. The company pays employment taxes equal to 15% of their employees' salaries. 9 . One-third of the insurance in the North Store is on the store's fixtures. 7. The "General office salaries" and "General office- other" relate to the overall management of Superior Markets, Incorporated. If the North Store were closed, one person in the general office could be discharged because of the decrease in overall workicad. This person's compensation is $6.240 per quarter. Required: 1. How much employee salaries will the company avolid if it closes the North Store? 2. How much employment taxes will the company avoid if it closes the North Store? 2. Whow is the financial advantage (disadvantage) of closing the North Store? that the North Store's floor space can't be subleased, would you recommend closing the North Store? hat the North Store's floor space can't be subleased. However, let's introduce three more assumptions. First, assume that if the North Store were closed, one-fourth of its sales would transfer to the East Store, due to strong customer loyalty to Superior Maricets. Second, assume that the East Store has enough capacity to handle the increased sales that would arise from closing the North Store. Third, assume that the increased sales in the East Store would yield the same gross margin as a percentage of sales as person's compensation is $6,240 per quarter. Required: 1. How much employee salaries will thi cori iny avoid if it closes the North Store? 2. How mach employment taxes will the compary avoid if it closes the North Store? 3. What is the financial advantage (disadvantage) of closing the North Store? 4. Assuming that the North Store's fioot space cantt be subleased, would you recommend closing the North Store? 5. Assume that the North Store's floor space can't be subleased. However, let's introduce three more assumptions. First, assume that if the North S4ore were closed, one-fourth of its sales would transfer to the East Store, due to strong customer ioyalty to Superior Markets. Second, assume that the East Store has enough capacity to handie the increased sales that would arise frem closing the North Store. Third, assume that the increased sales in the East Store would yield the same gross margin as a percentage of sales as present sales in the East store. Given these new assumptions, what is the ficancial advantage (disodvontage) of closing the North Stores Complete this question by entering your answers in the tabs below. How much employee salaries will the company avoid if it closes the North Store? 3. What is the financial ad? (a tavantage) of closing the North Store? 4. Assuming that the North L ire flc space can't be subleased, would you recommend closing the North Store? 5. Assume that the North Store's fioor space can't be subleased. However, let's introduce three more assumptions. First, assume the North Store were closed, one-fourth of its sales would transfer to the East Store, due to strong customer loyalty to Superior Markets. Second, assume that the East Store has enough capacity to handle the increased sales that would arise from closing the North Store. Third, assume that the increased sales in the East Store would yield the same gross margin as a percentage of sales present sales in the East store. Given these new assumptions, what is the financial advantage (disadvantage) of closing the North Store? Complete this question by entering your answers in the tabs below. How much employment taxes will the company avoid if it closes the North Store? Markets. Second, assume th, one-fourth of its sales would transfer to the East Store, due to strong customer loyalty to Superi North Store. Third, assume that the increased Store has enough capacity to handle the increased sales that would arise from closing present sales in the East store. Given these sales in the East Store would yield the same gross margin as a percentage of 5 Store? Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) of closing the North Store? (Enter any "disadvantages" as a negative value.) North Store. Third, assume that the increased sales in the capacity to handle the increased sales that would arise from closing th present sales in the East store. Given these new assumptions, what is the financial advantage (disadvan as a percentage of sales Store? Complete this question by entering your answers in the tabs below. Assume that the North Store's floor space can't be subleased. However, let's introduce three more assumptions. First, assume that if the North Store were closed, one-fourth of its sales would transfer to the East Store, due to strong customer loyaity to Superior Markets. Second, assume that the East Store has enough capacity to handle the increased sales that would arise from closing th. Woith Store. Third, assume that the increased sales in the East Store would yield the same gross margin as a percentage of as present sales in the East store. Given these new assumptions, what is the financial advantage (disadvantage) of closing the North Store? (Enter any "disadvantages" as a negative value.)