Shown as follows is a segmented income statement for Drexel-Hall during the current month. 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 $ 720,000 408 432,000 24 $ 288,000 16 180,000 10 $ 108,000 6% 36,000 2 $ 72,000 Store 1 Dollars $600,000 372,000 $228,000 120,000 $ 108,000 48,000 $ 60,000 3 100% 62 38% 20 18% 8 8 10% Profit Centers Store 2 Dollars $ $600,000 100% 378,000 63 $222,000 378 102,000 17 $120,000 208 66,000 11 $ 54,000 9% Store 3 Dollars $ $600,000 100 % 330,000 55 $ 270,000 456 210,000 35 $ 60,000 10 % 66,000 11 $ (6,000) (1) 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 $75,000, and sales at Store 2 to increase by $97,000. 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