Bed & Bath, a retailing company, has two departments, Hardware and Linens. The company's most recent monthly contribution format income statement follows: Linens $4,270,000 $3,190,000 $1,080,000 1394,000 992,000 402,000 Total Hardwar Sales Variable expenses Contribution margin Fixed expenses 2,876,000 2,198,000 678,000 2.230,000 1,390,000840,000 Net operating income (loss) 646.000 $ 808,000 S (162,000) A study indicates that $377,000 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 wil be the effect on the net operating income of the company as a whole? in net operating income References eBook & Resources Worksheet