Problem 11-26 Close or Retain a Store [L011-2 Superior Markets, Inc, operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below Income Statement For the Quarter Ended September 30 North South East Total Sales Cost of goods sold Gross margin Selling and administrative expenses 3,780,090 $800,000 $1,480,e00 $1,420,899 2,035,090 460,900 7 1,665,00 340,009 794,000 781,000 686,000 Selling expenses Administrative expenses 31,000 238,400 18,000 113,000 18,589 161,400 Total expenses Net operating income (loss) 274,100 143,600 417,700 416,00e $(11,400) 206,100 221,300 1.249,090 351,400 479,941 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 Selling expenses 214,800 $ 59,70 $ 72,200 82,989 172,00058,00079,88035,088 Sales salaries Direct advertising General advertising Store rent Depreciation of store fixtures Delivery salaries Depreciation of delivery 55,50012,000 22,200 21,300 35,000 92,000 127,680116,0e 6,780 7,7.50 3, 700 19,500 23,100 5,300 7,700 7,708 100 3,700 equipment Total selling expenses 831,000 $238 400 338,500$274,180 Allocated on the basis of sales dollars Prey2 of 3 Next>