Edit Insert Table Format Arrange View Share Window Help Ch10 (2) 125% Formula Ta

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Edit Insert Table Format Arrange View Share Window Help Ch10 (2) 125% Formula Table ChartText Shape Media ren P10-18A P10-21A Given P10-21A P10-23A For the Quarter Ended March 31 UptownDowntown Westpark Store $ 2,500,000 $ 900,000 600,000 1,000,000 1.450,000513,000 372,000 565,000 435,000 1,050,000 Selling and administrative expenses: 118,500 20,000 157,000 30,000 40,000 7,200 52,000 36,000 45,000 65,000 8,000 60,000 10,000 70,000 46,950 19,850 Depreciation of store fixtures Depreciation of delivery equipment 614.450 206,500 178,600 Administrative expenses: 63,000 50,000 89,800 25,500 36,000 25,000 289,300 20,000 18,000 31,000 8,000 25,000 20,000 31,600 Store management salaries General office salaries Insurance on fixtures and inventory General office expenses- other 27,200 13,800 10,000 10,200 9,000 98,000 903,750304.500 261,000 Total operating expenses Net operating income (loss) 146.250 82,500 S (33,000) 96.750 18,000 5,000 Manager's salary per quarter New employee's salary per month Employment tax as a percentage of salaries Delivery person's salary per quarter Insurance related to downtown fixtures Discharged employee's salary per quarter 12% 7,000 8,000 Assumed sales transferred to Uptown storeS Uptown store gross margin percentage 200,000 43%

Explanation / Answer

1 Thrifty markets, Inc. Schedule Gross Margin lost if the store is closed $228,000 Less: costs that can be avoided Direct advertising $36,000 Sales salaries $45,000 Delivery salaries $7,000 Store rent $65,000 Store management salaries $15,000 General office salaries $8,000 Utilities $27,200 Insurance on inventories $6,000 Employement tax $9,000 $218,200 Decrease in company net operating income if the Downtown store is closed $9,800 Salaries avoided by closing store Sales salaries $45,000 Delivery salaries $7,000 Store management salaries $15,000 General office salaries $8,000 Total Salaries $75,000 Employment Tax rate 12% Employment taxes avoided $9,000 Note: Store management salaries that can be avoided is the new manager's salary Insurance on inventories is 2/3 of $9000 3 Computations Gross margin lost if the Downtown store is closed ($228,000) Gross margin gained at the uptown store $86,000 Net loss in gross margin ($142,000) Costs that can be avoided if Downtown store is closed $218,200 Net advantage of closing the Downtown store $76,200

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