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One part question for managerial accounting Check my work 2 Bed & Bath, a retailing company, has two departmentsHardware and Linens. The company's most recent
One part question for managerial accounting
Check my work 2 Bed & Bath, a retailing company, has two departmentsHardware and Linens. The company's most recent monthly contribution format income statement follows: 10 points Sales Variable expenses Contribution margin Fixed expenses Department Total Hardware Linens $ 4,260,000 $3,140,000 $ 1,120,000 1,285,000 867,000 418,000 2,975,000 2,273,000 702,000 2,290,000 1,450,000 840,000 $ 685,000 $ 823,000 $ (138,000) eBook Net operating income (loss) Print References 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 12% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens DepartmentStep by Step Solution
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