Bed & Bath, a retalling company, has two departments-Hardware and Linens. The companys most recent...
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Bed & Bath, a retalling company, has two departments-Hardware and Linens. The companys most recent monthly contribution format Income statement follows Department Hardware Linens Total Sales Variable expenses Contribution margin Fixed expenses $4,220,000 $3,07e,800 $1,150,000 1,333,090 918,000 415,800 2,887,86e 2,152,800 735,800 2,280,e00 1,380,0e 9e,e00 607,ee0 Net operating income (loss) A study indicates that $376,000 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 unens Department wil result n a 12% decrease in the sales of the Hardware Department Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department
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