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Bucky's Home Center has two departments, Bath and kitchen. The most recent income statement for the company follows: Bath Kitchen Total Revised Total Company Company
Bucky's Home Center has two departments, Bath and kitchen. The most recent income statement for the company follows: Bath Kitchen Total Revised Total Company Company Sales $1,000,000 $4,000,000 $5,000,000 Variable Costs 300,000 1,600,000 1,900,000 Contribution Margin 700,000 2,400,000 3,100,000 Fixed Expenses 900,000 1,800,000 2,700,000 Operating Incomel (loss) $(200,000) $ 600,000 $400,000(a) A study indicates that $370,000 of the fixed expenses being charged to the Bath Department are sunk costs or allocated costs that will continue even if the Bath Department is dropped. In addition, the elimination of the Bath Department would result in a 10% decrease in the sales of the Kitchen Department. (a) Eliminating the Bath Division would result in a forecast Total Net Operating Income/ (loss) of $ enter negative number if a loss
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