$\backslash$table$[[$Lessing Toy and Hobby Northern Division For the Year Ending January $($$$000),],[$Sales revenue,$ $12,040],[$Costs$],[$Cost of goods sold,$ $6,020],[$Advertising$,490],[$Administrative salaries,$810],[$Sales commissions,$1,624],[$Rent and occupancy expense,$2,058],[$Allocated corporate support,$1,330],[$Total costs,$ $12,332],[$Net loss before tax benefit,$ $(292)],[$Tax benefit at $25\%,(73)],[$Net loss,$ $(219)]]$

The CEO has asked for your thoughts on the decision to close the Northern Division stores. If the Northern Division is eliminated and the stores closed, neither total corporate support costs nor operations or costs of the Southern Division stores are expected to change.

Required:

a$.$ Using the worksheet below, determine which revenues and costs are probably differential or not differential for the decision to close the Northern Division stores.

b$.$ What will be the effect on LTH$\text{'}$s income if the Northern Division stores are closed?

Complete this question by entering your answers in the tabs below.

Required:

c$.$ What considerations, other than costs, do you think are necessary before making this decision?

Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.

Whether the contract will provide for more revenues in the future.

Whether this will enable the company to get into a new, profitable line of business.

What other opportunities the company has for expanding.

$?$ Profitability of the other contracts.

$?$ Current financial position of the company.