Smith Corporation runs two convenience stores , one in Chicago and one in Denver . Operating income for each store in 2017 is as follows . Each store...

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Smith Corporation runs two convenience stores , one in Chicago and one in Denver . Operatingincome for each store in 2017 is as follows . Each store faces different competitive challenges . Ina senior management meeting you make the following statement , " we face three options : a ) donothing and keep both stores open , b ) close the Denver store and keep the Chicago store , or c )keep Chicago and Denver open , and open a new store in Cleveland . "Your statement is based on an analysis where equipment has a zero disposal value and leased onan annual contract . A further estimestimate is that sales , product mix and variable cost in Clevelandand Denver will be approximately the samthe same for the foreseeable future . Allocated corporate costwill not change by closing the Denver store and will increase by $4 000 with the Cleveland storeIn an effort to add value to the company you prepare three store segment reports and recommenda decision based on total profitsRequirement : Circle your decisionA : Do nothing B : Close the Denver Store C : Expand to ClevelandPrepare three reports in proper format on separate sheets showing the three options , supportingyour decision assuming profit maximization is your basis in making the above statementChicagoDenverRevenue8 1 070 000$ 860 00Operating expensesCost of goods sold ( all variable )750.000660.000Store security system ( contract avoidable90.00075 000V ( Labor costs ( paid on an hourly basis )4200042.000Equipment lease ( contract , avoidable )25.00022000Utilities ( heating , cooling , all variable )43.00046.000Allocated corporate overhead50 00040 000Total operating expenses1000.000885090Operating income ( loss )0.090(25 000)