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

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.

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The monthly responsibility margin of Stores $1$ and $2.$

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 $$48,000,$ and sales at Store $2$ to increase by $$109,000.$ Closing

Store $3$ is not expected to cause any change in common fixed costs.

Required:

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.