Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. exercise 11-17 (static) dropping or retaining a se

Exercise 11-17 (Static) Dropping or Retaining a Segment (LO11-2] Bed & Bath, a retailing company,...

70.2K

Verified Solution

Question

Accounting

image

Exercise 11-17 (Static) Dropping or Retaining a Segment (LO11-2] Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Total $ 4,000,000 1,300,000 2,700,000 2,200,000 $ 500,000 Department Hardware Linens $ 3,000,000 $ 1,000,000 900,000 400,000 2,100,000 600,000 1,400,000 800,000 $ 700,000 $ (200,000) A study indicates that $340,000 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 Linens Department will result in a 10% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Make a write up on half stepper sequence and full stepper sequence on stepper motor control....

Electrical Engineering
Q

Wiset Company completes these transactions during April of the current year (the terms of all its...

Accounting
Q

The tRNA nucleotide sequence that pairs with bases on the mRNA is called a n...

Biology
Q

A piece of zinc weighs 42g in air and 37 8g when immersed in oil...

Physics
Q

A sandwich shop is ordering apples and grapes to make chicken salad. Apples cost $2.19...

Basic Math
Q

La hipoteca restante del vendedor que se muestra en una declaracin de cierre se mostrara...

Accounting
Q

At the beginning of the month, the Forming Department of Martin Manufacturing had 12,000 units...

Accounting
Q

Assumption: X owns a rental building (its only asset) with a gross FMV of $1,000,...

Accounting
Q

The company uses a job-order costing system that applies manufacturing overhead costs to jobs on...

Accounting
Q

As the management accountant for Superior Log Cabins, Inc. you have been asked to attend...

Accounting
Q

Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following...

Accounting
Q

a) Best way Ltd bonds will mature in 15 years. The bonds have a face...

Finance