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Superior Markets, Incorporated, operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter
Superior Markets, Incorporated, 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, Incorporated Income Statement Total Gross margin Sales Cost of goods sold Selling expenses Selling and administrative expenses: Administrative expenses Total expenses Net operating income (loss) For the Quarter Ended September 30 North Store South Store East Store $ 3,300,000 1,822,920 $ 792,000 443,520 $ 1,320,000 726,000 $ 1,188,000 653,400 1,477,080 348,480 594,000 534,600 898,700 254,540 346,500 297,660 421,300 116,600 165,990 138,710 371,140 512,490 436,370 $ 81,510 $ 98,230 1,320,000 $ 157,080 $ (22,660) 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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