1.Salary of new employee = $12,000
Delivery crew = $5,100
Sales Salaries = $69,600
Store manager Salaries = $26,500- 13,000 = $13,500
General Office Salaries = $6,500
Employee Salaries Avoided per Quarter = $106,700
2.Employment Taxes Avoided = 106,700*15% = $16,005
3.Financial Advantage = costs avoided –margin lost
= Direct Advertising cost + Store Rent +2/3rd Insurance +Utilities + Salaries Avoided + Taxes Avoided- 340,000
= 62,000 + 80,000 + 10,800*2/3 + 27,620 + 106,700 + 16,005 – 345,000
= -$45,475 i.e. disadvantage
4.North store should not be closed, as there is a loss in closing the store
5.Financial Advantage of closing the north store = Gross Margin from Increased sales of East Store – Disadvantage calculated above
= (720,000/1,600,000)*860,000*1/4 – 45,475
=$51,275
Since there is net advantage, the store should be closed.
Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income...
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: points South Skipped Store Superior Markets, Inc. Income Statement For the Quarter Ended September 30 North Total Store Sales $4,200,000 $840,000 Cost of goods sold 2,310,000 500,000 Gross margin 1,890,000 340,000 Selling and administrative expenses: Selling expenses 841,000 243,400 Administrative expenses 443,000 118,000 Total expenses 1,284,000 361,400 Net operating income (loss) $ 606,000...
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: East Store $1,760,000 Superior Markets, Inc. Income Statement For the Quarter Ended September 30 North South Total Store Store Sales $4,400,000 $880,000 $1,760,000 Cost of goods sold 2,420,000 525,000 927,000 Gross margin 1,980,000 355,000 833,000 Selling and administrative expenses Selling expenses 845,000 245, 400 322,000 Administrative expenses 453,000 120,000 171,900 Total expenses 1,298,000...
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: Superior Markets, Inc. Income Statement For the Quarter Ended September 30 North Total Store Sales $4,600,000 $920,000 Cost of goods sold 2,530,000 565,000 Gross margin 2,070,000 355,000 Selling and administrative expenses: Selling expenses 849,000 247,400 Administrative expenses 463,000 122,000 Total expenses 1,312,000 369,400 Net operating income (loss) $ 758,000 $(14,400) South Store $1,840,000...
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: Superior Markets, Inc. Income Statement For the Quarter Ended September 30 North South Total Store Store Sales $4,000,000 $840,000 $1,600,000 Cost of goods sold 2,200,000 495,000 847,000 Gross margin 1,800,000 345,000 7 53,000 Selling and administrative expenses : Selling expenses 837,000 241,400 320,000 Administrative expenses 433.000 116,000 165,900 Total expenses 1,270,000 357,400 485,900...
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: 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: Superior Markets, Inc. Income Statement For the Quarter Ended September 30 North South Total Store Store Sales $4,600,000 $920,000 $1,840,000 Cost of goods sold 2,530,000 565,000...
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: Superior Markets, Inc. Income Statement For the Quarter Ended September 30 North South Total Store Store Sales $4,400,000 $880,000 $1,760,000 Cost of goods sold 2,420,000 525, 000 927,000 Gross margin 1,980,000 355,000 833,000 Selling and administrative expenses : Selling expenses 845,000 245,400 322,000 Administrative expenses 453,000 120,000 171,900 Total expenses 1,298,000 365, 400...
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: Superior Markets, Inc. Income Statement For the Quarter Ended September 30 Total North Store South Store East Store Sales $ 4,800,000 $ 960,000 $ 1,920,000 $ 1,920,000 Cost of goods sold 2,640,000 600,000 984,000 1,056,000 Gross margin 2,160,000 360,000 936,000 864,000 Selling and administrative expenses: Selling expenses 853,000 249,400 324,000 279,600 Administrative expenses...
Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement fo company for the last quarter is given below: Superior Markets, Inc. Income Statement For the Quarter Ended September 30 North Total Store Sales $4,000,000 $840,000 Cost of goods sold 2,200,000 495,000 Gross margin 1,800,000 345,000 Selling and administrative expenses: Selling expenses 837,000 241,400 Administrative expenses 433,000 116,000 Total expenses 1,270,000 357,400 Net operating income (loss) $ 530,000 $(12,400) South Store $1,600,000 847,000...
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: Superior Markets, Inc. Income Statement For the Quarter Ended September 30 North South Total Store Store Sales $3,300,000 $760,000 $1,320,000 Cost of goods sold 1,815,000 433,000 711,000 Gross margin 1,485,000 327,000 609,000 Selling and administrative expenses: Selling expenses 823,000 234,400 316,500 Administrative expenses 398,000 109,000 155,400 Total expenses 1,221,000343,400 471,900 Net operating income...
Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for th company for the last quarter is given below: Superior Markets, Inc. Income Statement For the Quarter Ended September 30 North South Total Store Store Sales $4,500,000 $900,000 $1,800,000 Cost of goods sold 2,475,000 550,000 935,000 Gross margin 2,025,000 350,000 865,000 Selling and administrative expenses: Selling expenses 847,000 246,400 322,500 Administrative expenses 458,000 121,000 173,400 Total expenses 1,305,000 367,400 495,900 Net operating...