Student Name: Jevin Yoder

Class: Bus 212

Problem 12-23
1.
THRIFTY MARKETS, INC.
Schedule
Gross margin lost if the store is closed
Less costs that can be avoided:
Direct advertising
Sales salaries
Delivery salaries
Store rent
Store management salaries
General office salaries
Utilities
Insurance on inventories
Employment taxes*
Decrease in company net operating income
if the Downtown Store is closed
*Salaries avoided by closing store:
Sales salaries
Delivery salaries
Store management salaries
General office salaries
Total salaries
Employment tax rate
Employment taxes avoided

3. Computations
Gross margin lost if the Downtown Store is closed
Gross margin gained at the Uptown Store
Net loss in gross margin
Less avoidable costs if Downtown Store is closed
Net advantage of closing the Downtown Store

$
$

36,000
45,000
7,000
65,000
15,000
8,000
27,200
6,000
9,000

(228,000)

218,200
$

(9,800)
Correct!

(228,000)
86,000
(142,000)
218,200
76,200
Correct!

45,000
7,000
15,000
8,000
75,000
12%
9,000
Correct!

Given Data P12-23:

THRIFTY MARKETS, INC.
Income Statement
For the Quarter Ended March 31

Sales
Cost of goods sold
Gross margin
Selling and administrative expenses:
Selling expenses:
Direct advertising
General advertising
Sales salaries
Delivery salaries
Store rent
Depreciation of store fixtures
Depreciation of delivery equipment
Total selling expenses
Administrative expenses:
Store management salaries
General office salaries
Utilities
Insurance on fixtures and inventory
Employment taxes
General office expenses - other
Total administrative expenses
Total operating expenses
Net operating income (loss)
Additional Data:
Manager's salary per quarter
New employee's salary per quarter
Employment tax as a percentage of salaries
Delivery person's salary per quarter
Insurance related to downtown fixtures
Discharged employee's salary per quarter
Assumed sales transferred to Uptown store
Uptown store gross margin percentage

$
$
$
$
$

Uptown
Store
900,000
513,000
387,000

Downtown
Store
$
600,000
372,000
228,000

118,500
20,000
157,000
30,000
215,000
46,950
27,000
614,450

40,000
7,200
52,000
10,000
70,000
18,300
9,000
206,500

36,000
4,800
45,000
10,000
65,000
8,800
9,000
178,600

63,000
50,000
89,800
25,500
36,000
25,000
289,300
903,750
146,250

20,000
18,000
31,000
8,000
12,000
9,000
98,000
304,500
82,500 $

18,000
12,000
27,200
9,000
10,200
6,000
82,400
261,000
(33,000)

Total
2,500,000
1,450,000
1,050,000

18,000
5,000
12%
7,000
1/3
8,000
200,000
43%

THRIFTY MARKETS, INC.

Income Statement
the Quarter Ended March 31
Westpark
Store
$
1,000,000
565,000
435,000

42,500
8,000
60,000
10,000
80,000
19,850
9,000
229,350

25,000
20,000
31,600
8,500
13,800
10,000
108,900
338,250
96,750