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1 10 points Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows:
1 10 points Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: eBook Print Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) References Total $ 4,170,000 1,311,000 2,859,000 2,170,000 $689,000 Department Hardvare $ 3,020,000 909,000 2,111,000 1,350,000 Linens $ 1,150,000 402,000 748,000 820,000 $ 761,000 (72,000) A study indicates that $372,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 11% decrease in the sales of the Hardware Department Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department?
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