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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 Hardware Linens nts
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Hardware Linens nts Total Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) 822,000 924,000 (102,000) $4,250,000 $3,150,000 $1,100,000 402,000 698,000 800,000 sklpped 1,308,000 2,942,000 2,244,000 2,120,000 1,320,000 906,000 eBook A study indicates that $379,000 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 14% decrease in the sales of the Hardware Department. Print eterences Requlred: What is the financial advantage (disadvantage) of discontinuing the Linens Department
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