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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: Hardware $4,110,000 $3,000,000

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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: Hardware $4,110,000 $3,000,000 $1,110,000 1,256,000 840,000 416,000 Total Linens Sales Variable expenses Contribution2,854,000 2,160,000 694,000 Fixed expenses 2,130,000 1,300,000 830,000 Net operating margin 724,000 $ 860,000 $ (136,000) income (loss) A study indicates that $375,000 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 11% decrease in the sales of the Hardware Department. Requred If the Linens Department is dropped, what will be the effect on the net operating income of the company as a whole? in net operating Decrease income

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