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Tracey's Home Center, a retailing company, has two departments, Bath and Kitchen. A recent monthly contribution format income statement for the company follows: A study
Tracey's Home Center, a retailing company, has two departments, Bath and Kitchen. A recent monthly contribution format income statement for the company follows: A study indicates that $370,000of the 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 will result in a 10% decrease in the sales of the Kitchen Department. If the Bath Department is dropped, what will be the effect on the net operating income of the company as a whole
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