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13-7 Bed & Bath, a retailing company, has two departments --Hardware and Linens The company's most recent monthly contribution format income statement follows: Sales Variable

13-7
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Bed & Bath, a retailing company, has two departments --Hardware and Linens The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (los) Total 3.4.120,000 127,000 3,747,000 2.190, 5557.000 Department Hardware lineas 53,000,000 $ 1.000.000 972.000 40100 2,055,000 659.000 1,300,000 830.000 5 728,000 $(172.000) DO A study indicates that $378,000 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 ces Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? nanical disadvantage $ (467.560

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