Sales Variable costs Contribution margin Traceable fixed costs: controllable Performance margin Traceable fixed costs: committed Store responsibility margin Common fixed costs Income from operations Drexel-Hall Dollars $1,800,000 100% 1,080,000 60 $ 720,000 40% 432,000 24 $ 288,000 16% 180,000 10 $ $ 108,000 68 36,000 2 2 $ 72,000 Store 1 Dollars $600,000 372,000 $228,000 120,000 $100,000 48,000 $ 60,000 8 100% 62 38% 20 188 B Profit Centers Store 2 Dollars $600,000 1008 378,000 63 $222,000 378 102,000 17 $120,000 208 66,000 11 $ 54,000 Store 3 Dollars $600,000 100 % 330,000 55 $270,000 45 % 210,000 35 $ 60,000 10 % 66,000 11 $ (6,000) (1) 10% All stores are similar in size, carry similar products, and operate in similar neighborhoods. Store 1 was established first and was built at a lower cost than were Stores 2 and 3. This lower cost results in less depreciation expense for Store 1. Store 2 follows a policy of minimizing both costs and sales prices. Store 3 follows a policy of providing extensive customer service and charges slightly higher prices than the other two stores. 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 $61,000, and sales at Store 2 to increase by $109,000. 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: a. Total monthly sales for Drexel-Hall stores. b. The monthly responsibility margin of Stores 1 and 2. C. The company's monthly income from operations. Complete this question by entering your answers in the tabs below. Required A Required B Required C The monthly responsibility margin of Stores 1 and 2. Monthly Responsibility Margin Store 1 Store 2