1. The lease on the building housing the North Store can be broken with no penalty.

2. The fixtures being used in the North Store would be transferred to the other two stores if the North Store were closed.

3. The general manager of the North Store would be retained and transferred to another position in the company if the North Store were closed. She would be filling a position that would otherwise be filled by hiring a new employee at a salary of $11,000 per quarter. The general manager of the North Store would continue to earn her normal salary of $12,000 per quarter. All other managers and employees in the North store would be discharged.

4. The company has one delivery crew that serves all three stores. One delivery person could be discharged if the North Store were closed. This persons salary is $4,600 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsolete.

5. The company pays employment taxes equal to 15% of their employees' salaries.

6. One-third of the insurance in the North Store is on the stores fixtures.

7. The General office salaries and General officeother relate to the overall management of Superior Markets, Inc. If the North Store were closed, one person in the general office could be discharged because of the decrease in overall workload. This persons compensation is $6,000 per quarter.

I solved for employee salaries $94,600 and employee taxes $14.190

Thank you!

a. The breakdown of the selling and administrative expenses that are shown above is as follows: North Store South Store East Store Total Selling expenses: Sales salaries Direct advertising General advertising Store rent Depreciation of store fixtures Delivery salaries Depreciation of delivery equipment Total selling expenses $221,400 171, eee 54, cee 330,000 19, eee 22,800 $ 61, eee 57, eee 12,00 91,00 5, 20e 7,600 $ 74,600 78, eee 21,600 126,000 6,600 7,600 $ 85,800 36,eee 20,400 113,000 7,200 7,600 10,800 $829,000 3,600 $ 237,400 3,600 $318,000 3,600 $273,600 *Allocated on the basis of sales dollars. North Store South Store East Store Total Administrative expenses: Store managers' salaries General office salaries Insurance on fixtures and inventory Utilities Employment taxes General office-other Total administrative expenses $ 79, eee 54, eee 31,eee 102, 42e 56,580 90, see $413, eee $ 24, eee 12,000 9,300 31,010 15,690 20, see $112,000 $ 33,eee 21,600 12, eee 36,780 20,520 36, eee $159,900 $ 22,000 20,400 9,7ee 34,630 20,370 34, see $141,100 *Allocated on the basis of sales dollars. What is the financial advantage (disadvantage) of closing the North Store? (Enter any "disadvantages" as a negative value.) Financial advantage (disadvantage) $ 133,700 Assume that the North Store's floor space can't be subleased. However, let's introduce three more assumptions. First, assume that if the North Store were closed, one-fourth of its sales would transfer to the East Store, due to strong customer loyalty to Superior Markets. Second, assume that the East Store has enough capacity to handle the increased sales that would arise from closing the North Store. Third, assume that the increased sales in the East Store would yield the same gross margin as a percentage of sales as present sales in the East store. Given these new assumptions, what is the financial advantage (disadvantage) of closing the North Store? (Enter any "disadvantages" as a negative value.) Show less A Financial advantage (disadvantage) $ 94,600 a. The breakdown of the selling and administrative expenses that are shown above is as follows: North Store South Store East Store Total Selling expenses: Sales salaries Direct advertising General advertising Store rent Depreciation of store fixtures Delivery salaries Depreciation of delivery equipment Total selling expenses $221,400 171, eee 54, cee 330,000 19, eee 22,800 $ 61, eee 57, eee 12,00 91,00 5, 20e 7,600 $ 74,600 78, eee 21,600 126,000 6,600 7,600 $ 85,800 36,eee 20,400 113,000 7,200 7,600 10,800 $829,000 3,600 $ 237,400 3,600 $318,000 3,600 $273,600 *Allocated on the basis of sales dollars. North Store South Store East Store Total Administrative expenses: Store managers' salaries General office salaries Insurance on fixtures and inventory Utilities Employment taxes General office-other Total administrative expenses $ 79, eee 54, eee 31,eee 102, 42e 56,580 90, see $413, eee $ 24, eee 12,000 9,300 31,010 15,690 20, see $112,000 $ 33,eee 21,600 12, eee 36,780 20,520 36, eee $159,900 $ 22,000 20,400 9,7ee 34,630 20,370 34, see $141,100 *Allocated on the basis of sales dollars. What is the financial advantage (disadvantage) of closing the North Store? (Enter any "disadvantages" as a negative value.) Financial advantage (disadvantage) $ 133,700 Assume that the North Store's floor space can't be subleased. However, let's introduce three more assumptions. First, assume that if the North Store were closed, one-fourth of its sales would transfer to the East Store, due to strong customer loyalty to Superior Markets. Second, assume that the East Store has enough capacity to handle the increased sales that would arise from closing the North Store. Third, assume that the increased sales in the East Store would yield the same gross margin as a percentage of sales as present sales in the East store. Given these new assumptions, what is the financial advantage (disadvantage) of closing the North Store? (Enter any "disadvantages" as a negative value.) Show less A Financial advantage (disadvantage) $ 94,600