Exercise 11-17 (Static) Dropping or Retaining a Segment [LO11-2] Bed \& Bath, a retalling company,...
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Exercise 11-17 (Static) Dropping or Retaining a Segment [LO11-2] Bed \& Bath, a retalling company, has two departments-Hardware and Linens. The company's most recent monthy contribution format income statement follows: A study indicotos that $340,000 of the fixed expenses being chorged 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 wili result in a 10% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Unens Department
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