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6 Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows 167 povs
6 Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows 167 povs Book Prin References Sales Variable expenses Contribution sargin Fixed expenses Net operating income (loss) Total $4,310,000 1,291,000 3,019,000 2,150,000 $869,000 Hardware $3,190,000 882,000 2,300,000 1,340,000 Department Linens $1,120,000 409,000 211,000 810,000 $ (99,000) $ 968,000 A study indicates that $379.000 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 15% decrease in the sales of the Hardware Department Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department?
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