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hello please help with the following question Bed & Bath, a retailing company, has two departmentsHardware and Linens. The company's most recent monthly contribution format

hello please help with the following question

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

Total Hardware Linens

  • Sales $ 4,000,000 $3,000,000 $1,000,000
  • Variable expenses 1,300,000 900,000 400,000
  • Contribution margin $ 2,700,000 $2,100,000 $600,000
  • Fixed expenses 2,200,000 1,400,000 800,000
  • Net operating income (loss) $500,000 $ 700,000 $ (200,000)

A study indicates that $340,000 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 10% decrease in the sales of the Hardware Department.

please help me with the below question

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

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