Shown as follows is a segmented income statement for Drexel-Hall during the current month Sales Drexel-Hall Store 1 Profit Centers Store 2 Store 3 Dollars $1,800,000 % 100% Dollars $600,000 Dollars 100x $600,000 X 100% Dollars $600,000 1,080,000 60 372,000 62 378,000 63 330,000 40% 432,000 24 $228,000 120,000 38% $222,000 37% 20 102,000 $ 288,000 180,000 16% 10 $108,000 48,000 18% $120,000 17 20% B 66,000 11 $ $ 108,000 36,000 72,000 6% $ 60,000 10% $ 54,000 9% $270,000 210,000 $ 60,000 $ (6,000) 100% 55 45%> 35 66,000 10% 11 (1)% 2 4% Variable costs Contribution margin Traceable fixed costs: controllable Performance margin Traceable fixed costs: committed $ 720,000 Store responsibility margin Common fixed costs Income from operations 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 $69,000, and sales at Store 2 to increase by $138,000. 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.