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Superior Markets, Inc, operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below Income Statement For the Quarter Ended September 30 North Store South East Sales Cost of goods sold Gross margin Selling and administrative 64,900,000 980,000 41,960,000 fi,960,000 997,000 1,078,000 882,000 2,695,000 2, 205, 000 620,000 360,000 963.000 Selling expenses Administrative expenses 855,000 250,400 324, 500 280,100 478,000 125,000 179,400 173, 600 1,333,000 375,400 503, 900 453, 700 $ 8 (15,400) 459. 100 428, 300 Total expenses Net operating income (losa) 872,000 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 a. The breakdown of the selling and administrative expenses that are shown above is as follows North South East Total Store Store Store Selling expenses: Sales salaries Direct advertising General advertising73,500 14,700 29,400 29, 400 $252,600 65, 400 75,400 4111,800 184, 000 7,000 91,00023,b00 Store rentn toe78,000 80, 000 107,000 91,000 Depreciation of store 25, 500 26,700 e, 900, 900 14,700 4,900 6,500 7,900 11.100 Eixtures Delivery salaries Depreciation of delivery equipment 4, 900 4, 900 Total selling expenses 855,000 $250,400 324, 500 $280, 100 Allocated on the basis of sales dollars

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