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Help Save &Exit Submit 10 Check my work Bed & 8ath, a income statement follows retailing company, has two departments-Hardware and Linens. The com pany's
Help Save &Exit Submit 10 Check my work Bed & 8ath, a income statement follows retailing company, has two departments-Hardware and Linens. The com pany's most recent monthly contribution format Departsent Total Hardware t Snens Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) 4,070,000 3,10,000 1,060,000 406,000 2,745,000 2,091,000654,000 840,000 405,000 $ 591,000 (186,000 1325,000 919,000 2.340,000 1,500,000 A study indicates that $378,000 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 19% decrease in the sales of the Hardware Department. nces Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department
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