< > EXHIBIT 22-5 Responsibility Income Statement for 42nd Street Store Profit Centers Repairs Department $20,000 42nd Street Store Sales Department Sales Variable costs Contribution margin Fixed costs traceable to departments Departmental responsibility margin Common fixed costs Responsibility margin for store $ 200,000 98,000 $180,000 90,000 8,000 $ 102,000 $ 90,000 $ 12,000 32,000 18,000 14,000 $ 70,000 $ 72,000 $ (2,000) 28,000 $ 42,000 According to these data, discontinuing the repairs department would eliminate $20,000 in revenue and $22,000 in costs ($8,000 in variable costs and $14,000 in traceable fixed costs). Thus, closing this department might well increase the profitability of the store by $2,000-its negative margin. hp