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Business, 16.10.2020 04:01 dianamachado14

Show belows 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 $1,800,000 100% $600,000 100% $600,000 100% $600,000 100%
Variable
costs 1,080,000 60 372,000 62 378,000 63 330,000 55
Contribution
margin $720,000 40% $228,000 38% $222,000 37% $270,000 45%
Traceable
fixed costs:
controllable 432,000 24 120,000 20 102,000 17 210,000 35
Performance
margin $288,000 16% $108,000 18% $120,000 20% $60,000 10%
Traceable
fixed costs:
committed 180,000 10 48,000 8 66,000 11 66,000 11
Store
responsibility
margin $108,000 6% $60,000 10% $54,000 9% $(6,000) (1)%
Common
fixed costs 36,000 2
Income
from
operations $72,000 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 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 $60,000, and sales at Store 2 to increase by $120,000. Closing Store 3 is not expected to cause any change in common fixed costs. A. Total monthly sales for Drexel-Hall stores. B. The monthly responsibility margin of Stores 1 and 2.C. The company.

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Show belows is a segmented income statement for Drexel-Hall during the current month. Profit Center...
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