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. Superior Markets, Income Statement For the arter Ended September 30 South East Total Store store Store Sales 54,020,000 3966,500 51.son, $11.497,200 cost of rods sold 140.28 181,400 5,20 Selling and ministrativa pens Selling experts 1.094.780 119,076 12,100 Administrative penses 51220 142 MB 302-200 Total expenses 3:11:52 Set pertine Income Kloss) 5 191.252 The North Store hos consistently shown bosses out the past two years. For this reason, management is giving consideration to doing the store. The company has asked you to make a recommendation as to whether the store should be dosed or keptopen The following additional Information is available for you a. The breakdown of the selling and administrative expenses that are shown above is as follows: Total North Store South Store East Store Selling expenses Sales salaries Direct advertising General advertising Store rent Depreciation of store fixtures Delivery salaries Depreciation of delivery equipment Total selling expenses $ 320,260 250,580 60,300 402,800 21,440 28,140 12,060 $1,094,780 $ 93,800 $119, 260 $107,200 68,340 96,480 85,760 14,472 24,120 21,708 113,900 160, 800 127,300 6,164 8,040 7,236 9,380 9,380 9,380 4,020 4,020 4,020 $310, 076 $422, 100 $362, 604 *Allocated on the basis of sales dollars. Total North Store South store Cast Store 25,460 24, 120 Adainistrative expenses: Store managers' salaries General office salaries Insurance on fixtures and inventory Utilities Employment taxes General office other Total administrative expenses 593,800 67,000 33,500 142040 76,380 100, 500 $513.220 $ 28,140 15,000 10,50 41,50 22,110 24 120 $14.40 $ 40,200 26,300 12,060 53,600 29 40 200 5202,206 40,000 24, 924 16.130 $168.974 "Allocated on the basis of sales dollars. "Allocated on the basis of sales dollars b. The lease on the building housing the North Store can be broken with no penalty, c. The fixtures being used in the North Store would be transferred to the other two stores if the North Store were closed d. The general manager of the North Store would be retained and transferred to another position in the company at the North Store were closed. She would be filling a position that would otherwise be filled by hiring a new employee at a salary of $14.740 per quarter. The general manager of the North Store would continue to earn her normal salary of $16.080 per quarter. All other managers and employees in the North store would be discharged, e. The company has one delivery crew that serves all three stores. One delivery person could be discharged if the North Store were closed. This person's salary is $5,360 per quarter the delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsalete, The company pays employment taxes equal to 15% of their employees salaries. g. One third of the insurance in the North Store is on the store's fixtures 1. The "General office salaries" and "General office other relate to the overall management of Superior Markets, Inc. If the North Store were closed, one person in the general office could be discharged because of the decrease in overall workload. This person's compensation is $8,040 per quarter Required: 1. How much employee salaries will the company avold it closes the North Store? 2. How much employment taxes will the company void if it doses the North Store? 3. What is the financial advantage (disadvantages of closing the North Store 4. Assuming that the North Stores Hoor space can't be sublessed, would you recommend closing the North Store? 5. Assume that the North Store's toor space can't be sublevased. However, let's Introduce three more assumptions. First assume that it the North Store were closed, one fourth of its soles would transfer to the East Store, due to strong customer loyalty to Superior Markets. Second, assume that the East Store has enough capacity to handle the increased sales that would arise from closing the North Store Third, assume that the increased sales in the East Store would yield the same gross mains a percentage of sales as present sales in the East store. Given these new assumptions, what is the financial advantage disadvantage of closing the North Store? Complete this question by entering your answers in the tabs below. Rehaired 1 Required 2 Required 3 Required 4 Required 5 How much employee salaries will the company avoid if it closes the North Store? Employee salaries Route Required 2 > to search o 3 How much employment taxes will the company avoid if it closes the North Store! What is the financial advantage (disadvantage) of closing the North Store? 5. Assuming that the North Store's floor space can't be subleased, would you recommend 5. Assume that the North Store's floor space can't be subleased. However, let's Introducet the North Store were closed, one-fourth of its sales would transfer to the East Store, due to Markets. Second, assume that the East Store has enough capacity to handle the increased North Store. Third, assume that the increased sales in the East Store would yield the same present sales in the East store. Given these new assumptions, what is the financial advantag Store? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Required 4 Required 5 How much employment taxes will the company avold if it closes the North Store? Employment taxes & Prov 3.6 to search * 33 3. What is the financial advantage (disadvantage) of closing the North Store! 4. Assuming that the North Store's floor space can't be subleased, would you recomme 5. Assume that the North Store's floor space can't be subleased. However, let's Introdu the North Store were closed, one-fourth of its sales would transfer to the East Store, du Markets. Second, assume that the East Store has enough capacity to handle the increa North Store. Third, assume that the increased sales in the East Store would yield the sa present sales in the East store. Given these new assumptions, what is the financial adva Store? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Required 4 Required 5 What is the financial advantage (disadvantage) of closing the North Store? (Enter any disadu Financial advantage (disadvantage