Bed & Bath, a retailing company, has two departmentsHardware and Linens. The companys most recent monthly contribution format income statement follows:

Sales $4,090,000 $3,090,000 $1,000,000

Variable expenses 1,398,000 982,000 416,000

Contribution margin 2,692,000 2,108,000 584,000

Fixed expenses 2,280,000 1,450,000 830,000

Net operating income (loss)$412,000 $658,000 $(246,000)

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.

Bed & Bath, a retailing company, has two departmentsHardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Department Total Hardware Linens $ 4,090,000 $3,090,000 $1,000,000 1,398,000 982,000 416,000 2,692,000 2,108,000 584,000 2,280,000 1,450,000 830,000 $ 412,000 $ 658,000 $ (246,000) Net operating income (loss) 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? Financial (disadvantage)