Assume a retailing company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Total $ 800,000 350,000 450,000 400,000 $ 50,000 Department A $ 350,000 250,000 100,000 140,000 $ (40,000) Department B $ 450,000 100,000 350,000 260,000 $ 90,000 The company says that $60,000 of the fixed expenses being charged to Department A are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department A is discontinued the sales in Department B will drop by 18%. What is the financial advantage (disadvantage) of discontinuing Department A?

Assime a retaling conpany has fwo departments-Department A and Bopartment id. The company's mostrecent contaloution format income statement folows: Department A2 The compary says that $60,000 of the foxed expenses beling dheiged to Department A are aunk corts or aSocated costs that witt contiour if the uegment is Depiatment A Mictole Choice 102000 Ha01000 Histooo