Requirements L - X 1. By closing down the Rhode Island store, Sanchez can reduce overall corporate overhead costs by $40,000. Calculate Sanchez'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 2. Calculate Sanchez'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 $21,000 to acquire equipment with a 1-year useful life and zero disposal value). Opening this store will increase corporate overhead costs by $7,000. Is Maria Lopez's statement about the effect of adding another store like the Rhode Island store correct? Explain. L3 More info The equipment has a zero disposal value. In a senior management meeting, Maria Lopez, the management accountant at Sanchez Corporation, makes the following comment, "Sanchez can increase its profitability by closing down the Rhode Island store or by adding another store like it." - X Sanchez Corporation runs two convenience stores, one in Connecticut and one in Rhode Island Operating income for each store in 2020 is as follows (Click to view the operating income for the stores.) (Click the icon to view the add or drop segments information Read the requirements Data table Requirement 1. By closing down the Rhode Island store, Sanchez can reduce over effect of closing the Rhode Island store correct? Explain Begin by calculating Sanchez's operating income if it closes the Rhode Island store the amount with parentheses or a minus sign) Revenues Revenues Operating costs Cost of goods sold Lease rent (renewable each year) Labor costs (paid on an hourly basis) Depreciation of equipment Utilities (electricity, heating) Corporate overhead Total operating costs Effect on operating income (loss) (Loss in Revenues) Savings in Costs Xx and sto Connecticut Store Rhode Island Store levant $ 1,100,000 $ 860.000 Operating costs Cost of goods sold 800,000 680,000 Lease rent (renewable each year) 86,000 77.000 Labor costs (paid on an hourly basis) 44,000 47,000 Depreciation of equipment 28,000 21,000 Utilities (electricity, heating) 43.000 54,000 52,000 Allocated corporate overhead 36,000 1,053,000 915,000 Total operating costs $ 47,000 $ (55.000) Operating income (loss) Print Done