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, Inc. Income Statement For the Quarter Ended September 30 North South East Sales Total $4,500,000 Store Store Store $900,000 $1,800,000 $1,800,000 Cost of goods sold 2,475,000 550,000 935,000 990,000 Gross margin 2,025,000 350,000 865,000 810,000 Selling and administrative expenses: Selling expenses 847,000 246,400 322,500 278,100 Administrative expenses 458,000 121,000 173,400 163,600 Total expenses 1,305,000 367,400 495,900 441,700 Net operating income (loss). $ 720,000 $ (17,400) $ 369,100 $ 368,300 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: Total North Store South East Store Store Selling expenses: Sales salaries $237,000 $ 63,800 $ 71,000 $102,200 Direct advertising 180,000 66,000 87,000 27,000 General advertising+ 67,500 13,500 27,000 27,000 Store rent 300,000 84,000 117,000 99,000 Depreciation of store fixtures 23,500 6,100 7,500 9,900 Delivery salaries 25,500 8,500 8,500 8,500 Depreciation of delivery equipment 13,500 4,500 4,500 4,500 Total selling expenses $847,000 $246,400 $322,500 $278,100 *Allocated on the basis of sales dollars.