Question:
The Alpha Omega Food Giant Company owns and operates a chain of 125 supermarkets.
Budgeted data for the Cypress store are as follows:
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Annual sales
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$425,000
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Annual cost of goods sold and other operating expenses
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382,000
|
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Annual building ownership costs (not included above)
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20,000
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The company can lease the building to a large flower shop for $4,000 per month. Decide whether to continue operating this store or to lease, using:
1. The total project (or comparative statement) approach
2. The incremental (or relevant cost) approach
3. The opportunity cost approach