Perez Corporation runs two convenience stores, one in Minneapolis and one in New York. Operating income for each store in 2013 is as follows: Cick to view the operating income for the stores.) or by adding The equipment has a zero disposal value. In a senior management meeting, Alex Lizzi, the management accountant at Perez another store like it Data Table Read the requirements York Requirement 1. By closing down the New York store, Perez can reduce overall corporate overhead costs by $43,000. Calculate store correct? 1,130,000 S 810,000 Calculate Peres Requirements Operating costs Cost of goods sold Lease rent (renewable each year) Labor costs (paid on an hourly basis) Depreclation of equipment Utities (electricity, heat) Allocated corporate overhead 725 92 620,000 76,000 37,000 18,000 46,000 37,000 834,000 (24,000) 1. By closing down the New York store, Perez can reduce overall corporate overhead costs by $43,000. Calculate Perez's operating income it it closes the New York store. Is Alex Lizzs statement about the effect of closing the New York store correct? Explain. Operating costs 2. Calculate Perezs operating income it it keeps the New York store open and opens ancther store 21 Cost of goods Lease rent Labor costs ( with revenues and costs identical to the New York store (including a cost of $18,000 to acquire equipment with a 1-year useful life and zero disposal value). Opening this store will increase corporate overmead costs by 53,000. Is Alex Lizzis statement about the effect cf adding another store like the New York store correct? Explain. 51 Total operating costs 161,000 S Utilities Operating income (loss) Print Done Enter any number