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 South Store East Store $ 4,020,000 2,220,648 $ 964,800 $ 1,608,000 $ 1,447,200 540,288 884,400 795,960 1,799,352 424,512 723,600 651,240 1,094,780 513,220 1,608,000 310,076 422,100 362,604 142,040 202,206 168,974 452,116 624,306 531,578 $ 191,352 $ (27,604) $ 99,294 $ 119,662 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:

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 South Store East Store $ 4,020,000 2,220,648 $ 964,800 $ 1,608,000 $ 1,447,200 540,288 884,400 795,960 1,799,352 424,512 723,600 651,240 1,094,780 513,220 1,608,000 310,076 422,100 362,604 142,040 202,206 168,974 452,116 624,306 531,578 $ 191,352 $ (27,604) $ 99,294 $ 119,662 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:

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter6: Inventories

Section: Chapter Questions

Problem 3MAD: The general merchandise retail industry has a number of segments represented by the following...

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