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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: eBook Print
Bed & Bath, a retailing company, has two departmentsHardware and Linens. The company's most recent monthly contribution format
income statement follows:
eBook
Print
A study indicates that $ 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 decrease in the
sales of the Hardware Department.
Required:
What is the financial advantage disadvantage of discontinuing the Linens Department?
Financial disadvantage
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