E22.7: Top management of Drexel-Hall is considering closing Store 3. The three stores are close enough together that management estimates closing Store 3 would cause sales at Store 1 to increase by $60,000, and sales at Store 2 to increase by $120,000. Closing Store 3 is not expected to cause any change in common fixed costs. Compute the increase or decrease that closing Store 3 should cause in

1. Total monthly sales for Drexel-Hall stores.
2. The monthly responsibility margin of Stores 1 and 2.

Drexel-Hall Monthly responsibility margin of Stores 1 and 2. Store 1 Store 2 $%$%Sales660,000100620,000100Variable Cost409,20062390,00063Contribution Margin250,00038119,40037Traceable fixed cost132,00020105,40017Performance margin118,00018124,00020Traceable fixed cost: Committed52.800868,20011Store Responsibility Margin66,0001055,8009