BA511-L9A2 - Student Name: Class: THRIFTY MARKERS, INC....

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Class: THRIFTY MARKERS, INC. Schedule Gross margin lost if the store is closed ($228,000) Less costs which can be avoided: Direct advertising $36,000 Sales salaries 45,000 Delivery salaries 7,000 Store rent 65,000 Store management salaries 15,000 General office salaries 8,000 Utilities 27,200 Insurance on inventories 6,000 Employment taxes* 218,200 Decrease in company net operating income if the Downtown Store is closed ($9,800) Correct! *Salaries avoided by closing store: Sales salaries $45,000 Delivery salaries 7,000 Store management salaries 15,000 General office salaries Total salaries 75,000 Employment tax rate Employment taxes avoided $ 9,000 ( 3.) Computations: Gross margin lost if the store is closed ($228,000) Gross margin gained at the Uptown Store Net loss in gross margin (142,000) Less avoidable costs if Downtown is closed Net advantage of closing Downtown Store $76,200 Correct! 9,000
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BA511-L9A2 - Student Name: Class: THRIFTY MARKERS, INC....

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