Exercise $13-17($Algo$)$ Dropping or Retaining a Segment $[$LO$13-2]$

Bed & Bath, a retailing company, has two departments$-$Hardware and Linens. The company's most recent monthly contribution format

income statement follows:

A study indicates $$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 $12\%$ decrease in the sales of the

Hardware Department.

Required:

What is the financial advantage $($disadvantage$)$ of discontinuing the Linens Department?