Papa Fred Pizza is a chain of pizza outlets. Store 16 has fallen on hard times and is targeted to be closed. The following figures are available for the period just ended:

Sales........................................................................215,000

Cost of Sales .........................................................73,000

Building occupancy costs:

Rent.............................................................................35,000

Utilities.........................................................................15,050

Supplies used............................................................5,600

Wages..........................................................................77,500

Miscellaneous............................................................2,500

Allocated corporate overhead..........................13,825

(Including depreciation)

If Store 16 were closed, all employees except the store manager would be discharged. the manager, who currently earns 27,000 annually, would be transferred to store 19 in a neighbouring suburb. Also, store 16 furnishings and equipment are fully depreciated and would be removed and transported to Papa Dred's warehouse at a cost of 2,675

Required:

1. What is store 16 traceable reported gain/loss for the period ended?
2. List and explain the relevant costs
3. Should the store be closed? Why? Why not? be specific
4. Would Papa Fred's likely lose all 215,000 of sales revenue if store 16 were closed? Explain what other issues should Papa Fred's management consider in addition to the financial issues you have addressed?
5. What are your recommendations?