Lone Star Meat Packers is a major processor of beef and other meat products. The company has a large amount of T-bone steak on hand, and it is trying to decide whether to sell the T-bone steaks as they are initially cut or to process them further into filet mignon and the New York cut.

If the T-bone steaks are sold as initially cut, the company figures that a 1-pound T-bone steak would yield the following profit:

Selling price ($2.10 per pound)	$2.10
Less joint costs incurred up to the split-off point where T-bone steak can be identified as a separate product	1.40
Profit per pound	$0.70

As mentioned above, instead of being sold as initially cut, the T-bone steaks could be further processed into filet mignon and New York cut steaks. Cutting one side of a T-bone steak provides the filet mignon, and cutting the other side provides the New York cut. One 16-ounce T-bone steak cut in this way will yield one 6-ounce filet mignon and one 8-ounce New York cut; the remaining ounces are waste. The cost of processing the T-bone steaks into these cuts is $0.12 per pound. The filet mignon can be sold for $4.00 per pound, and the New York cut can be sold for $3.10 per pound.

Requirement 1:

Determine the profit per pound from processing the T-bone steaks into filet mignon and New York cut steaks. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Profit per pound

$___________________________

Quesrtion 2:

Superior Markets, Inc., 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, Inc. Income Statement For the Quarter Ended September 30
	Total	North Store	South Store	East Store
Sales	$3,028,000	$717,000	$1,219,000	$1,092,000
Cost of goods sold	1,636,840	401,000	668,000	567,840
Gross margin	1,391,160	316,000	551,000	524,160
Selling and administrative expenses:
Selling expenses	747,700	218,200	288,700	240,800
Administrative expenses	345,100	100,400	125,200	119,500
Total expenses	1,092,800	318,600	413,900	360,300
Net operating income (loss)	$298,360	$(2,600)	$137,100	$163,860

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:

a.	The breakdown of the selling and administrative expenses is as follows:

	Total	North Store	South Store	East Store
Selling expenses:
Sales salaries	$219,000	$68,000	$82,000	$69,000
Direct advertising	155,000	44,000	59,000	52,000
General advertising*	41,800	9,600	17,600	14,600
Store rent	292,000	85,000	116,000	91,000
Depreciation of store fixtures	14,400	3,700	5,400	5,300
Delivery salaries	19,500	6,700	6,900	5,900
Depreciation of delivery equipment	6,000	1,200	1,800	3,000
Total selling expenses	$747,700	$218,200	$288,700	$240,800

*Allocated on the basis of sales dollars.

	Total	North Store	South Store	East Store
Administrative expenses:
Store management salaries	$66,200	$20,300	$28,200	$17,700
General office salaries*	47,800	11,000	19,400	17,400
Insurance on fixtures and inventory	21,800	6,600	8,200	7,000
Utilities	83,200	29,900	20,000	33,300
Employment taxes	53,800	15,100	20,700	18,000
General office