1.Hagar, Inc. is a retail chain with 125 stores organized into 5 regions. The most recent annual income statement for the Snert, ND store is given below (in $000). It is typical of recent years, and Hagar is considering closing the store because of chronic losses. What factors should Hagar consider in making the decision?
Gross margin 870
Store management 110
Regional management 78
Depreciation 87 933
Net loss (63)
Advertising consists of 60% local ads, and 40% allocation of national advertising costs. Regional management represents an allocation of the cost of operating the regional office. These are fixed costs except for $1,000/year of travel costs to visit the Snert store. Depreciation costs are $60,000 for the building, and $27,000 for equipment and fixtures. If the store is closed, the building could be rented out for $27,000/year. The equipment and fixtures have no value and would be junked. Occupancy costs include $20,000 of taxes and insurance which must be paid on the building as long as it is owned. The remaining occupancy costs, such as maintenance and utilities, would be paid by a tenant if the building is rented.
PLEASE SEE ATTACHED -
I also attached a copy of the questions in Word as the formatting of the above numbers is skewed.
This question was answered on: Sep 16, 2020
Need a similar solution fast, written anew from scratch? Place your own custom order
We have top-notch tutors who can help you with your essay at a reasonable cost and then you can simply use that essay as a template to build your own arguments. This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student. New solution orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.