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Shown as follows is a segmented income statement for Drexel-Hall during the current month. Shown as follows is a segmented income statement for Drexel-Hall during

Shown as follows is a segmented income statement for Drexel-Hall during the current month.

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Shown as follows is a segmented income statement for Drexel-Hall during the current month. Profit Centers Drexel-Hall Store 1 Store 2 Store 3 Dollars % Dollars % Dollars % Dollars % Sales $1,899, 999 199% $699,999 199% $699,999 199% $699, 999 199 % Variable costs 1,989,999 69 372,999 62 378,999 63 339,999 55 Contribution mar'gin $ 729,999 49% $228,999 38% $222,999 37% $279,999 45 % Traceable fixed costs: controllable 432,999 24 129,999 29 192,999 17 219,999 35 Performance margin $ 288,999 16% $198,999 18% $129,999 29% $ 69,999 19 % Traceable fixed costs: committed 189,999 19 48,999 8 66,999 11 66,999 11 Store responsibility margin $ 198,999 6% $ 69,999 19% $ 54,999 9% $ (6,999) (1)% Common fixed costs 36,999 2 Income from operations $ 72,999 4% 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 ninimizing both costs and sales prices. Store 3 follows a policy of providing extensive customer service and charges slightly higher Jrices than the other two stores. l'op management of DreerHall 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 $74,000, and sales at Store 2 to increase by $129,000. 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 Dreer-Hall stores. b. The monthly responsibility margin of Stores 1 and 2. :. The company's monthly income from operations

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