Problem 11-26 (Algo) Close or Retain a Store [LO11-2] Superior Markets, Incorporated, operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below. Sales Superior Markets, Incorporated Income Statement Total For the Quarter Ended September 30 Cost of goods sold Gross margin Selling and administrative expenses Selling expenses Administrative expenses Total expenses Net operating income (loss) $ 3,480,000 1,922,352 North Store $ 835,200 467,712 South Store $ 1,392,000 765,600 East Store $ 1,252,800 689,040 1,557,648 367,488 626,400 563,760 947,720 268,424 365,400 313,896 444,280 122,960 175,044 146,276 1,392,000 391,384 540,444 460,172 $ 165,648 $ (23,896) $ 85,956 $103,588 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: