Making a decision to close or continue to operate a store. A new accountant at the Faulkner Company has made an analysis of the profitability of each of the company’s 20 stores. The following data relate to Store 6:

The accountant suggests that the store should be closed.

a. Do you agree or disagree?

b. What additional information would be helpful in making this decision?

Sales for year Cost of goods sold Gross profit on sales Direct expenses incurred in store $1,200,000 840,000 $ 360,000 338,000 Contribution of store $ 22,000 Indirect expenses: General and administrative $ 30,000 Interest 8,000 Total indirect expenses $ 38,000 Net loss for year $ (16,000)