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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: Department Total Hardware Linens

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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: Department Total Hardware Linens Sales $ 4,140,000 $ 3,950,000 $ 1,090,ce Variable expenses 1,215,000 811,000 404,000 Contribution margin 2,925,880 2,239,000 685, Bee Fixed expenses 2,360,000 1,500,000 860, eee Net operating income (loss) $ 565, eee 5.739,000 $ (174,890) A study Indicates that $374,000 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 Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Answer is complete but not entirely correct. Financial (disadvantage 536,105

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