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im extremely confused Superior Markets, Incorporated, operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the
im extremely confused
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 For the Quarter Ended September 30 Total North Store South Store East Store Sales $4,000,000 $ 979,200 $ 1.632,000 $ 1,468,800 Cost of goods sold 2,253,792 548, 352 897,600 807.840 Gross margin 1,826, 208 430.848 734.400 660.960 Selling and administrative expenses Selling expenses 1,111,120 314,704 420,400 368,016 Administrative expenses 520,880 146.160 205,224 171,496 Total expenses 1.632,000 458,864 633,624 539,512 Net operating income thos) $ 194,208 $(28,016) $ 100.776 $ 121,440 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: o The breakdown of the selling and administrative expenses that are shown above is as follows: Selling expenses Sales salarios Direct advertising General advertising Store rent Depreciation of store tixtures Delivery satarken Depreciation of delivery equipment Total selling expenson "Allocated on the basis of sales dollars. Total $ 325,040 254,320 61,200 408,000 21,760 211,560 12,249 $1,111,120 North Both Store Mast store $ 95,200 5 121,040 $ 100,000 69,360 97,920 07.040 14.680 24,480 22.032 115,600 163,200 129,200 6.256 0.160 7.344 9.520 9.520 9.520 6.00 4.000 4.000 $314.704 5.428.400 $363.016 Step by Step Solution
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