Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin. Fixed expenses Net operating income (loss) Total $ 4,170,000 1,249,000 2,921,000 2,270,000 $ 651,000 Financial (disadvantage) Department Hardware $ 3,130,000 845,000 2,285,000 1,430,000 $855,000 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? A study indicates that $380,000 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 15% decrease in the sales of the Hardware Department. Linens $1,040,000 404,000 636,000 840,000 $ (204,000)