The Tilots Corporation's segmented absorption costing income statement for the last quarter for its three metropolitan stores is given below Uptown Downtown Westpark Total 1,450,000 1,050,000 Store 513,000 387,000 Store 372,000 228,000 Store Sales $2,500,000 $900,000 600,000 $1,000,000 565,000 Cost of goods sold Gross margin Selling and administrative expenses: 435,000 Selling expenses: Direct advertising General advertising Sales salaries Deliver Store rent Depreciation of store fixtures Depreciation of delivery 118,500 20,000 157,000 30,000 215,000 46,950 40,000 7,200 52,000 10,000 70,000 18,300 36,000 4,800 45,000 10,000 65,000 8,800 42,500 8,000 60,000 10,000 80,000 19,850 y salaries equipment 27,000 9,000 9,000 9,000 Total selling expenses 614,450 206,500 178,600 229,350 Administrative expenses: Store management salaries General office salaries Utilities Insurance on fixtures and 63,000 50,000 89,800 20,000 18,000 31,000 18,000 12,000 27,200 25,000 20,000 31,600 8,500 13,800 inventory 25,500 36,000 8,000 12,000 9,000 10,200 Employee benefits General office 25,000 289,300 903,750 10,000 108,900 338,250 96,75e expenses-other 9,000 98,000 304,500 146,25082,500 (33,0e0) 6,000 82,400 261,000 Total administrative expenses Total operating expenses Operating income (loss) Allocated on the basis of sales dollars Management is very concerned about the Downtown Store's inability to show a profit, and consideration is being given to closing the store. The company has asked you recommend a course of action. Additional information available on the store is provided below: a. The manager of the store has been with the company for many years; he would be retained and transferred to another position in the company if the Downtown Store were closed. His salary is $6,000 per month, or $18,000 per quarter. If the store were not closed, a new employee would be hired to fill the other position at a salary of $5,000 per month b. The lease on the building housing the Downtown Store can be broken with no penalty C. The fixtures being used in the Downtown Store would be transferred to the other two stores if the Downtown Store were closed d Employee benefits are 12% of salaries e. A single delivery crew serves all three stores. One delivery person could be discharged if the Downtown Store were closed, this person's salary amounts to $7,000 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but it does eventually become obsolete f One-third of the Downtown Store's insurance relates to its fixtures g. The general office salaries and other expenses relate to the general management of the Tilots Corporation. The employee in the general office who is responsible for the Downtown Store would be discharged if the store were closed. This employee's compensation amounts to $8,000 per quarter. Requirea 1. Prepare a schedule showing the change in revenues and expenses and the impact on the overall company operating income that would result if the Downtown Store were closed. (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.) Less costs that can be avoided