Sanchez Corporation runs two convenience stores, one in Connecticut and one in Rhode Island. Operating income...
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Sanchez Corporation runs two convenience stores, one in Connecticut and one in Rhode Island. Operating income for each store in 2020 is as follows: (Click to view the operating income for the stores.) (Click the icon to view the add-or-drop segments information.) Read the requirements. Requirement 1. By closing down the Rhode Island store, Sanchez can reduce overall corporate overhead costs by $40,000. Calculate Sanchez's operating income if it closes the Rhode Island store. Is Maria Lopez's statement about the effect of closing the Rhode Island store correct? Explain. Begin by calculating Sanchez's operating income if it closes the Rhode Island store. (Complete all input fields. Enter losses in revenues as a negative amount. Enter a "0" if the cost is not relevant. If the net effect is an operating loss enter the amount with parentheses or a minus sign.) Revenues Operating costs Cost of goods sold Lease rent (renewable each year) Labor costs (paid on an hourly basis) Depreciation of equipment Utilities (electricity, heating) Corporate overhead Total operating costs Effect on operating income (loss) (Loss in Revenues) Savings in Costs Is Maria Lopez's statement about the effect of closing the Rhode Island store correct? Explain. Lopez is that Sanchez Corporation's operating income would increase if it closes down the Rhode Island store as shown by the analysis above. Note that by closing down the Rhode Island store, Sanchez Corporation will save none of the because this is a past cost. Requirement 2. Calculate Sanchez's operating income if it keeps the Rhode Island store open and opens another store with revenues and costs identical to the Rhode Island store (including a cost of $22,000 to acquire equipment with a 1-year useful life and zero disposal value). Opening this store will increase corporate overhead costs by $3,000. Is Maria Lopez's statement about the effect of adding another store like the Rhode Island store correct? Begin by calculating Sanchez's operating income if it keeps the Rhode Island store open and opens another store with revenues and costs identical to the Rhode Island store. (If the net effect is an operating loss, enter the amount with parentheses or a minus sign.) Revenues Operating costs Cost of goods sold Lease rent (renewable each year) Labor costs (paid on an hourly basis) Depreciation of equipment Incremental Revenues (Incremental Costs) operating loss, enter the amount with parentheses or a minus sign.) Incremental Revenues (Incremental Costs) Revenues Operating costs Cost of goods sold Lease rent (renewable each year) Labor costs (paid on an hourly basis) Depreciation of equipment Utilities (electricity, heating) Corporate overhead Total operating costs Effect on operating income (loss) Is Maria Lopez's statement about the effect of adding another store like the Rhode Island store correct? Lopez is that Sanchez Corporation's operating income would increase if it adds another store like the Rhode Island store as shown by the analysis above. Sanchez Corporation runs two convenience stores, one in Connecticut and one in Rhode Island. Operating income for each store in 2020 is as follows: (Click to view the operating income for the stores.) (Click the icon to view the add-or-drop segments information.) Read the requirements. Requirement 1. By closing down the Rhode Island store, Sanchez can reduce overall corporate overhead costs by $40,000. Calculate Sanchez's operating income if it closes the Rhode Island store. Is Maria Lopez's statement about the effect of closing the Rhode Island store correct? Explain. Begin by calculating Sanchez's operating income if it closes the Rhode Island store. (Complete all input fields. Enter losses in revenues as a negative amount. Enter a "0" if the cost is not relevant. If the net effect is an operating loss enter the amount with parentheses or a minus sign.) Revenues Operating costs Cost of goods sold Lease rent (renewable each year) Labor costs (paid on an hourly basis) Depreciation of equipment Utilities (electricity, heating) Corporate overhead Total operating costs Effect on operating income (loss) (Loss in Revenues) Savings in Costs Is Maria Lopez's statement about the effect of closing the Rhode Island store correct? Explain. Lopez is that Sanchez Corporation's operating income would increase if it closes down the Rhode Island store as shown by the analysis above. Note that by closing down the Rhode Island store, Sanchez Corporation will save none of the because this is a past cost. Requirement 2. Calculate Sanchez's operating income if it keeps the Rhode Island store open and opens another store with revenues and costs identical to the Rhode Island store (including a cost of $22,000 to acquire equipment with a 1-year useful life and zero disposal value). Opening this store will increase corporate overhead costs by $3,000. Is Maria Lopez's statement about the effect of adding another store like the Rhode Island store correct? Begin by calculating Sanchez's operating income if it keeps the Rhode Island store open and opens another store with revenues and costs identical to the Rhode Island store. (If the net effect is an operating loss, enter the amount with parentheses or a minus sign.) Revenues Operating costs Cost of goods sold Lease rent (renewable each year) Labor costs (paid on an hourly basis) Depreciation of equipment Incremental Revenues (Incremental Costs) operating loss, enter the amount with parentheses or a minus sign.) Incremental Revenues (Incremental Costs) Revenues Operating costs Cost of goods sold Lease rent (renewable each year) Labor costs (paid on an hourly basis) Depreciation of equipment Utilities (electricity, heating) Corporate overhead Total operating costs Effect on operating income (loss) Is Maria Lopez's statement about the effect of adding another store like the Rhode Island store correct? Lopez is that Sanchez Corporation's operating income would increase if it adds another store like the Rhode Island store as shown by the analysis above.
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