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Requirement 1. By closing down the Rhode Island store, Lopez can reduce overall corporate overhead costs by $46,000. Calculate Lopez's operating income if it closes

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Requirement 1. By closing down the Rhode Island store, Lopez can reduce overall corporate overhead costs by $46,000. Calculate Lopez's operating income if it closes the Rhode Island store. Is Maria Lopez's statement about the effect of closing the Rhode Island store correct? Explain. Begin by calculating Lopez's operating income if it closes the Rhode Island store. (Complete all answer boxes. Enter losses in revenues as a negative amount. Enter a "' if the cost is not relevant. If the net effect is an operating loss enter the amount with parentheses or a minus sign.) (Loss in Revenues) Data Table Savings in Costs Revenues Connecticut Rhode Island Operating costs Store Store Cost of goods sold Revenues S 1,110,000 $ B30,000 Lease rent (renewable each year) Operating costs Labor costs (paid on an hourly basis) Cost of goods sold 790,000 840,000 Depreciation of equipment Lease rent (renewable each year) 92,000 77,000 Utilities (electricity, heating) , ) Labor costs (paid on an hourly basis) 43,000 38,000 Corporate overhead Depreciation of equipment 23,000 24,000 Total operating costs Utilities (electricity, heating) 46,000 43,000 Effect on operating income (loss) Allocated corporate overhead 54,000 40.000 Requirements Total operating costs 1,048,000 362,000 Operating income (loss) S 62,000 $ (32,000) 1. By closing down the Rhode Island store, Lopez can reduce overall corporate overhead costs by $46,000. Calculate Lopez's operating income if it closes the Rhode Island store. Is Maria Lopez's statement about the effect of closing the Rhode Island store correct? Explain. More Info Enter any number in the edit fields and then click 2. Calculate Lopez's operating income if it keeps the Rhode Island store open and opens another store with revenues and costs identical to the Rhode Island store (including a cost of $24,000 to 3 parts acquire equipment with a one-year useful life and zero disposal value). Opening this store will remaining increase corporate overhead costs by $3,000. Is Maria Lopez's statement about the effect of The equipment has a zero disposal value. In a senior management meeting, Maria adding another store like the Rhode Island store correct? Explain. Lopez, the management accountant at Lopez Corporation, makes the following comment, "Lopez can increase its profitability by closing down the Rhode store or by adding another store like it." Print Done Print Done

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