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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
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 Store South Store East Store Total Sales Cost of goods sold Gross margin Selling and administrative expenses: $4,800,000 $960,000 1,920,000 $1,920,000 984,000 1,056,000 864,000 2,640,000 600,000 360,000 2,160,000 936,000 853,000 249,400 473,000 124,000 373,400 $ 834,000 $ (13,400) 324,000 177,900 501,900 Selling expenses Administrative expenses 279,600 171,100 450,700 434,100 413,300 1,326,000 Total expenses Net operating income (loss) 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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