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 Selling and administrative expenses: Gross margin Selling expenses Administrative expenses Total expenses North Store $ 3,960,000 2,187,504 $ 950,400 532,224 1,772,496 418,176 South Store $ 1,584,000 871,200 712,800 East Store $ 1,425,600 784,080 641,520 1,078,440 505,560 1,584,000 305,448 415,800 357,192 139,920 199,188 166,452 445,368 614,988 523,644 $188,496 $ (27,192) $ 97,812 Net operating income (loss) $117,876 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 General office salaries Insurance on fixtures and inventory Utilities Total North Store South Store East Store $ 315,480 246,840 59,400 396,000 $92,400 $117,480 $ 105,600 67,320 95,040 84,480 14,256 23,760 21,384 112,200 150,400 125,400 21,120 6,072 7,920 7,128 27,720 9,240 9,240 9,240 11,080 3,960 3,960 3,960 $ 1,070,440 $305,440 $415,800 $357,192 Total North Store South Store East Store 6 92,400 $27,720 39,600 $25,000 66,000 33,000 15,840 26,400. 23,760 9,900 11,880 11,220) 139,920 40,920 52,800 46,200