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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: A study
Bed \& Bath, a retailing company, has two departments - Hardware and Linens. The company's most recent monthly contribution format. income statement follows: 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 oddition, the elimination of the Linens Department will result in a 16% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department
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