the top headings from left to right are Total, Uptown Store, Downtown Store, Westpark Store.

PROBLEM 12-23 Close or Retina Store (LOZ Thrifty Markets, Inc., operates the stores in a large metropolitan Area. The company's bsorption costing income statement for the last quarter is given below $900,000 513.000 387 000 $500,000 372.000 228,000 $1,000,000 585.000 435.000 40,000 7200 52.000 36.000 4.800 45.000 10,000 65.000 200 0.000 00.000 10,000 0.000 19,850 10.000 70,000 18,300 .500 $2.500.000 Cost of goods sold... 1,450.000 Gross margin 1,050.000 Selling and administrative expenses: Selling expenses Direct advertising..... 118.500 General advertising'..... 20.000 Sales salaries 157.000 Delivery series.... 30,000 Store rent....... 215.000 Depreciation of store fixtures.... 46,950 Depreciation of delivery equipment. 27.000 Total selling expenses......... 614,450 Administrative expenses: Store management salaries..... 63,000 General office salaries 50.000 U . 89,800 Insurance on odures and inventory... 25.500 Employment taxes... 36,000 General office expenses other 25 000 Total administrative expenses..... Total operating expenses............ 903.750 Not operating income oss)..... $168.250 "Allocated on the basis of sales dollars 9,000 206,500 9,000 178.600 9.000 229.350 20,000 18.000 31.000 18.000 12,000 27,200 25.000 20,000 31.500 8.000 12.000 8.500 13.000 10.200 6.000 $2,400 10.000 108.900 98,000 304,500 $ 82,500 261.000 $ 1.000 $ 0.750 Management is very concerned about the Downtown Store y how a protocol eration is being given to closing the store. The company has asked you to make c i asto what counts of action should be taken. The following addition information is wilable about the The manager of the store has been with the company for many years, he would be raised and transferred to another position in the company if there were closed. His s y is $6.000 per month, 18.000 per quarter. If there were not c o mployee would bered to fill the other positions salary of $5,000 per These on the building housing the Dow Store can be boke with peo The fines being used in the Downtowa Store would be sened to the other two sit the Dow Store were closed The company's employment ter 125 of series A ngle delivery Crew ves all three delivery could be discharged the Downtown Stoneware closed this person's salarym $7.000 per qua T he delivery would be distributed to the others . The g ent does not w ould wsbut it does evenly become obale One-third of the Downtown Store n ce relates to its fixtures. The general office salaries and other expenses relate to the general management of Thrifty Mars, Inc. The employee is the general office who is responsible for the Downtown Store would be discharged if there were closed. This employee's compensation amonto 58.000 per quanto View Zoom Add Category Insert Table Chart + P12-23 Problem 12-23 THRIFTY MARKETS, INC. Schedule Gross margin lost if the store is closed Less costs that can be avoided: Direct advertising Sales salaries Delivery salaries Store rent Store management salaries General office salaries Utilities Insurance on inventories Employment taxes Decrease in company net operating income if the Downtown Store is closed "Salaries avoided by closing store: Sales salaries Delivery salaries Store management salaries General office salaries Total salaries Employment tax rate Employment taxes avoided 3. Computations Gross margin lost if the Downtown Store is closed Gross margin gained at the Uptown Store Net loss in gross margin Loss avoidable costs if Downtown Store is closed Net advantage of closing the Downtown Store MacBook