Hi. Can you help me with this? Thanks! Baits Home Center, a retailing company, has two departments,
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Hi. Can you help me with this? Thanks!
Baits Home Center, a retailing company, has two departments, Bath and Kitchen. The company's most recent monthly contribution format income statement follows: nm $5 000 000 $1 000 000 $4 000 000 Variable Expenses 1,900,000 300,000 1,600,000 Contribution Margin 3,100,000 700,000 2,400,000 2 700 000 900 000 1 300 000 Net operating Income mmm A study indicates that $370,000 of 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 CM of the Kitchen Department. If the Bath Department is dropped, what will be the effect on the NOI of the company as a whole? Show and label your computations. Contribution margin lost from Bath Dept Contribution mar_in lost from Kitchen De-t\" Total lost contribution margin Less: Avoidable fixed cost\" Overall decrease increase on NOI
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