Bed & Bath, a retailing company, has two departments: hardware and linens. A recent monthly income statement for the company follows: Sales Less: Variable expenses Contribution margin Less: Fixed expenses Net operating income (loss) Department Hardware Linens Total $3,000,000 $1,000,000 $4,000,000 900,000 400,000 1,300,000 2,100,000 600,000 2,700,000 1,400,000 800,000 2,200,000 $ 700,000 $ (200,000) $ 500,000 A study indicates that $240,000 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 20% decrease in the sales of the hardware department. Required: If the linens department is dropped, what will be the effect on the net operating income of the company as a whole? X Answer is complete but not entirely correct. by $ 640,000 X decreased Net operating income 40C Sunny