PROBLEM 1

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

Total Sales $ 4,999,999 Variable expenses 1,366,666 Contribution margin 2,766,666 Fixed expenses 2,266,666 Net operating income (loss) $ 566,666 Hardware Linens $ 3,999,999 $ 1,999,999 999,999 2,186,866 1,486,866 $ 786,866 $ 486,868 686,866 886,866 (299,999)