Superior Markets, Inc. operates three stores in a metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below. Superior Markets, Inc.
Income Statement
For the Quarter Ended September 30
TotalNorth
StoreSouth
StoreEast
Store
Sales$3,100,000 $1,200,000 $600,000 $1,300,000
Cost of goods sold 1,589,000 540,000 360,000 569,000
Gross margin 1,511,000 660,000 240,000 731,000
Selling and administrative expenses:
Selling expenses 601,600 196,132 177,316 228,152
Administrative expenses 295,900 102,222 81,261 112,417

Total expenses 897,500 298,354 258,577 340,569

Net operating income (loss)$613,500 $(241,646)$18,577 $390,431
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:

a. The breakdown of the selling and administrative expenses is as follows:
TotalNorth
StoreSouth
StoreEast
Store
Selling expenses:
Sales salaries $154,000 $49,000 $42,000 $63,000
Direct advertising 116,900 34,000 40,000 42,900
General advertising* 13,000 5,032 2,516 5,452
Store rent 205,000 68,000 62,000 75,000
Depreciation of store fixtures 46,700 18,100 8,800 19,800
Delivery salaries 42,000 14,000 14,000 14,000
Depreciation of delivery equipment 24,000 8,000 8,000 8,000
Total selling expenses$601,600 $196,132 $177,316 $228,152
*Allocated on the basis of sales dollars.
TotalNorth
StoreSouth
StoreEast
Store
Administrative expenses:
Store management salaries$68,000 $24,000 $15,000 $29,000
General office salaries* 46,000 17,806 8,903 19,291
Insurance on fixtures and inventory 23,400 7,300 8,300 7,800
Utilities 98,600 33,000 32,000 33,600
Employment taxes 37,900 11,600 12,800 13,500
General office�other* 22,000 8,516 4,258 9,226
Total administrative expenses$295,900 $102,222 $81,261 $112,417
*Allocated on the basis of sales dollars.

b. The lease on the building housing the North Store can be broken with no penalty.
c.
The fixtures being used in the North Store would be transferred to the other two stores if the North Store were closed.

d.
The general manager of the North Store would be retained and transferred to another position in the company if the North Store were closed. She would be filling a position that would otherwise be filled by hiring a new employee at a salary of $12,000 per quarter. The general manager of the North Store would be retained at her normal salary of $15,000 per quarter. All other employees in the store would be discharged.

e.
The company has one delivery crew that serves all three stores. One delivery person could be discharged if the North Store were closed. This person�s salary is $5,000 per quarter. The delivery equipment would be distributed to the other stores. The equipment does not wear out through use, but does eventually become obsolete.

f. The company�s employment taxes are 12% of salaries.
g. One-third of the insurance in the North Store is on the store�s fixtures.
h.
The �General office salaries� and �General office�other� relate to the overall management of Superior Markets, Inc. If the North Store were closed, one person in the general office could be discharged because of the decrease in overall workload. This person�s compensation is $7,500 per quarter.

Required:
1.
Prepare a schedule showing the change in revenues and expenses and the impact on the company�s overall net operating income that would result if the North Store were closed. (Any losses/ reductions should be indicated by a minus sign.)

I have most of this---what I need to know is the store management salaries and the employment taxes thats it.

Gross margin lost if the store is closed $(660,000)
Costs that can be avoided:
Store rent$68,000
Sales salaries49,000
Delivery salaries5,000
Insurance on inventories4,867
Employment taxes
Direct advertising34,000
Utilities33,000
Store management salaries
General office compensation7,500
Salary of new manager12,000
228,367
Decrease in company profits if the North Store is closed $(431,633)