Martinez Corporation runs two convenience stores, one in Connecticut and one in Rhode Island. Operating income for each store in 2017 is as follows: (Click to view the operating income for the stores.) i (Click the icon to view the add-or-drop segments information.) Read the requirements. Requirement 1. By closing down the Rhode Island store, Martinez can reduce overall corporate overhead costs by $50,000. Calculate Martinez'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 Martinez's operating income if it closes the Rhode Island store. (Complete all answer boxes. 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 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 Effect on operating income (loss) Is Maria Lopez's statement about the effect of closing the Rhode Island store correct? Explain. Lopez is that Martinez Corporation's operating income would increase if it closes down the Rhode Island store as shown by the analysis above. Note that by closing down the Rhode Island store, Martinez Corporation will save none of the because this is a past cost. Requirement 2. Calculate Martinez's operating income if it keeps the Rhode Island store open and opens another store with revenues and costs identical to the Rhode Island store (including a cost of $18,000 to acquire equipment with a one-year useful life and zero disposal value). Opening this store will increase corporate overhead costs by $8,000. Is Maria Lopez's statement about the effect of adding another store like the Rhode Island store correct? Begin by calculating Martinez's operating income if it keeps the Rhode Island store open and opens another store with revenues and costs identical to the Rhode Island store. (If the net effect is an operating loss, enter the amount with parentheses or a minus sign.) Revenues Operating costs Incremental Revenues (Incremental Costs) Data Table 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 Effect on operating income (loss) Is Maria Lopez's statement about the effect of adding another store like the Rhode Island store correct? Revenues Connecticut $ Store 1,120,000 $ Rhode Island Store 810,000 Operating costs Cost of goods sold 750,000 660,000 Lease rent (renewable each year) 96,000 72,000 Labor costs (paid on an hourly basis) 41.000 42.000 Depreciation of equipment 27,000 18,000 Lopez is that Martinez Corporation's operating income would increase if it adds another store like the Rhode Island store as shown by the analysis above. Utilities (electricity, heating) Allocated corporate overhead Total operating costs 40,000 42,000 48,000 43,000 1,002,000 877,000 $ 118,000 $ (67,000) Operating income (loss) Enter any number in the edit fields and then continue to the next question. Print Done