Problem 11-26 (Algo) Close or Retain a Store [LO11-2] Superior Markets, Incorporated, 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, Incorporated Income Statement For the Quarter Ended September 30 Total Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income (loss) North Store South Store East Store $ 3,180,000 1,756,632 $ 763,200 427,392 $ 1,272,000 699,600 $ 1,144,800 629,640 1,423,368 866,020 405,980 1,272,000 335,808 572,400 515,160 245,284 333,900 286,836 112,360 159,954 133,666 357,644 493,854 420,502 $ 151,368 $ (21,836) $ 78,546 $ 94,658 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 that are shown above is as follows: