Question
Problem 13-26 (Algo) Close or Retain a Store [LO13-2] Superior Markets, Incorporated, operates three stores in a large metropolitan area. A segmented absorption costing
Problem 13-26 (Algo) Close or Retain a Store [LO13-2] 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 Sales Cost of goods sold Gross margin Solling and administrative expenses: Selling expenses Administrative expenses. Total expensed Net operating Income (loss) For the Quarter Ended September 30 Total $ 4,020,000 North Store $964, 800 South Store $1,608, 000 2220648 1.799. 352 540 288 864, 400 Eart Store $1,447, 200 795,960 424.512 723, 600 651, 240 1,094.280 310.076 422 100 360, 804 513, 20 142 040 202. 206 168, 974 1,608,000 452, 116 024, 206 531.578 $191,352 $ (27.604) $90,294 $119,662 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:
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