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 $5,000,000 $960,000 $2,000,000 $2,040,000 2,750,000 600,000 1,028,000 1,122,000 918,000 2,250,000 360,000 972,000 Selling expenses Administrative expenses 280,600 176,100 456,700 $ 910,000 (17,400) 466,100 461,300 857,000 251,400 483,000 126,000 1,340,000 377,400 325,000 180,900 505,900 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 North Store South Store East Store Total Selling expens es: Sales salaries Direct advertising General advertising* Store rent Depreciation of store fixtures Delivery salaries Depreciation of delivery $246,000 64,400 71,000 14,400 185,000 75,000 283,000 26,000 27,000 92,000 30,000 81,000 108,000 8,000 9,000 73,000 $108,600 22,000 30,600 94,000 11,400 9,000 6,600 9,000 15,000 5,000 5,000 5,000 equipment Total selling expenses $857,000 $251,400 $325,000 $280,600 Allocated on the basis of sales dollars