Lopez Corporation runs two convenience stores, one in Connecticut and one in Rhode Island. Operating income for each store in 2014 is as follows: 5 Click to view the operating income for the stores.) The equipment has a zero disposal value. In a senior management meeting, Maria Lopez, the management accountant at Lopez Corporation, makes the following comment, "Lopez can increase its profitability by closing down the Rhode Island store." Is Maria Lopez Correct? Read the requirements Requirement 1. By closing down the Rhode Island store, Lopez can reduce overall corporate overhead costs by $43,000. Calculate Lopez's operating income if it closes the Rhode Island store. Is Maria Lopez's statement about the effect of closing the Rhode Island store correct? Explain. Begin by calculating Lopez's operating income if it closes the Rhode Island store. (Enter losses in revenues as a negative amount. Enter a "0" if the cost is not relevant. If the net effect is an operating loss enter the amount with parentheses or a minus sign.) (Loss in Revenues) Savings in Costs Data table Connecticut Store Rhode Island Store $ 1,120,000 $ 830,000 Revenues Operating costs Cost of goods sold Lease rent (renewable each year) Labor costs (paid on an hourly basis) Depreciation of equipment Utilities (electricity, heating) Corporate overhead Total operating costs 780,000 640,000 87,000 79,000 Revenues Operating costs Cost of goods sold Lease rent (renewable each year) Labor costs (paid on an hourly basis) Depreciation of equipment Utilities (electricity, heating) Allocated corporate overhead Total operating costs 42,000 40,000 22.000 18,000 Effect on operating income (loss) 44.000 48,000 53,000 38,000 Is Maria Lopez's statement about the effect of closing the Rhode Island store correct? Explain. 1,023,000 868,000 Lopez is that Lopez Corporation's operating income would increase if it closes down the Rhode Island store as shown by the analysis above. $ 97.000 $ (38,000) Operating income (loss) Print Done