Wizards & Blizzards, a local entertainment store, has two departments -- Comics and Board Games. The company's most recent annual contribution format income statement follows Department Total Comics Board Games Sales 2,100,000.00 1,600,000.00 500,000.00 Variable expenses 700,000.00 450,000.00 250,000.00 Contribution margin 1,400,000.00 1,150,000.00 250,000.00 Fixed expenses 1,100,000.00 700,000.00 400,000.00 Net operating income (loss) 300,000.00 450,000.00 (150,000.00) Research indicates that $170,000 of the fixed expenses being charged to the Board Games department are sunk costs or allocated costs that will continue even if the Board Games department is dropped. In addition, the elimination of the Board Games department is expected to result in a 12% decrease in sales of the Comics department. ------------------------------------------

1. Currently, what % of sales is represented by the Board Games department (answer in decimal format to two places)?

2. If the Board Games department is dropped, what would be the total amount of contribution margin lost?

3. If the Board Games department is dropped, how much of fixed expenses could be avoided?

4. What is the financial advantage (disadvantage) of dropping the Board Games department?