The Tilots Corporation's segmented absorption costing income statement for the last quarter for its three metropolitan stores is given below: Total ~ Uptown StoreDowntown StoreWestpark Store Sales $2,500,000 900000 600,000 1,000,000 Cost of goods sold 1450000 513,000 312,000 565,000 Gross margin 1,050,000 387,000 226,000 435,000 Selling and administrative expenses Selling expenses Direct advertising 118500 40,000 36,000 42,500 General advertising\" 20,000 1,200 4,800 8,000 Sales salaries 157000 52,000 45,000 60,000 Delivery salaries 30000 10,000 10,000 10,000 Store rent 215000 70,000 65,000 80,000 Depreciation of store fidures 46950 18300 8,600 19,850 Depreciation of delivery equipment 27,000 9,000 9,000 9,000 Total selling expenses 614450 206,500 178,600 229 350 Administrative expenses: Store management salaries 63000 20,000 18,000 25,000 General office salaries 50000 18,000 12,000 20,000 Utiliies 89800 31,000 27200 31,600 Insurance on fixtures and inventory 25,500 8,000 9,000 8,500 Employee benefits 36000 12,000 10,200 13,800 General office expensesother' 25,000 9,000 6,000 10,000 Total administrative expenses 209300 98,000 82,400 108 900 Total operating expenses 903,750 304,500 261,000 338,250 Operating income (loss) 1462505 82500 (3300008 96,750 *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: 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. The lease on the building housing the Downtown Store can be broken with no penalty. The fixtures being used in the Downtown Store would be transferred to the other two stores if the Downtown Store were closed. Employee benefits are 12% of salaries. 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. One-third of the Downtown Store's insurance relates to its fixtures. 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. T e