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 For the Quarter Ended September 30 Total Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses North Store South Store East Store $ 4,020,000 2,220,648 $ 964,800 $ 1,608,000 $ 1,447,200 540,288 884,400 795,960 1,799,352 424,512 723,600 651,240 1,094,780 513,220 1,608,000 310,076 422,100 362,604 142,040 202,206 168,974 452,116 624,306 531,578 $191,352 $ (27,604) Net operating income (loss) $ 99,294 $ 119,662 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: Selling expenses: Sales salaries Direct advertising General advertising Store rent Depreciation of store fixtures Delivery salaries Depreciation of delivery equipment Total selling expenses "Allocated on the basis of sales dollars. Administrative expenses: Store managers' salaries. Total North Store South Store East Store $ 320,260 250,580 60,300 $ 93,800 $ 119,260 $ 107,200 68,340 96,480 85,760 14,472 24,120 21,708 402,000 113,900 160,800 127,300 21,440 6,164 8,040 7,236 28,140 9,380 9,380 9,380 12,060 4,020 4,020 4,020 $ 1,094,780 $310,076 $ 422,100 $ 362,604 Total $ 93,800 North Store South Store East Store $ 28,140 $40,200 $25,460