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
	Total			North Store			South Store			East Store
Sales	$	3,500,000		$	780,000		$	1,400,000		$	1,320,000
Cost of goods sold		1,925,000			450,000			749,000			726,000
Gross margin		1,575,000			330,000			651,000			594,000
Selling and administrative expenses:
Selling expenses:		827,000			236,400			317,500			273,100
Administrative expenses		408,000			111,000			158,400			138,600
Total expenses		1,235,000			347,400			475,900			411,700
Net operating income (loss)	$	340,000		$	(17,400	)	$	175,100		$	182,300

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 is as follows:

	Total		North Store		South Store		East Store
Selling expenses:
Sales salaries	$	228,000	$	62,600	$	77,000	$	88,400
Direct advertising		170,000		56,000		77,000		37,000
General advertising*		52,500		11,700		21,000		19,800
Store rent		325,000		90,000		125,000		110,000
Depreciation of store fixtures		18,500		5,100		6,500		6,900
Delivery salaries		22,500		7,500		7,500		7,500
Depreciation of delivery equipment		10,500		3,500		3,500		3,500
Total selling expenses	$	827,000	$	236,400	$	317,500	$	273,100

*Allocated on the basis of sales dollars.

Total

North Store

South Store

East Store

Administrative expenses:

Store management salaries

$

77,500

$

23,500

$

32,500

$

21,500

General office salaries*

52,500

11,800

21,000

19,700

Insurance on fixtures and inventory

30,000

9,000

11,500

9,500

Utilities

103,425

31,390

37,700

34,335

Employment taxes

57,075

15,810

20,700

20,565

General office other*

87,500

19,500

35,000

33,000

Total administrative expenses

$

408,000

$

111,000

$

158,400

$

138,600

*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 if 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 $10,800 per quarter. The general manager of the North Store would be retained at her normal salary of $11,800 per quarter. All other employees in the 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 persons salary is $4,500 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsolete.
f.	The companys employment taxes are 15% of salaries.
g.	One-third of the insurance in the North Store is on the stores fixtures.
h.	The General office salaries and General officeother 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 persons compensation is $5,900 per quarter.

Required:
1.	Prepare a schedule showing the change in revenues and expenses and the impact on the companys overall net operating income that would result if the North Store were closed. (Any losses/ reductions should be indicated by a minus sign.)