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 Net operating income (loss) North Store $ 3,060,000 1,690,344 $ 734,400 411,264 1,369,656 323,136 South Store $ 1,224,000 673,200 550,800 East Store $ 1,101,600 833,340 236,028 321,300 390,660 108,120 153,918 605,880 495,720 276,012 128,622 1,224,000 344,148 475,218 404,634 $ 145,656 $ (21,012) $ 75,582 $ 91,086 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: Total North Store South Store East Store Selling expenses: Sales salaries $243,780 $71,400 Direct advertising 190,740 52,020 $ 90,780 73,440 $ 81,600 65,280 General advertising 45,900 11,016 18,360 16,524 Store rent 306,000 86,700 122,400 96,900 Depreciation of store fixtures 16,320 4,692 6,120 5,508 Delivery salaries 21,420 7,140 7,140 7,140 Depreciation of delivery equipment 9,180 3,060 3,060 3,060 A FAVE ALS