Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. exercise 12-17 dropping or retaining a segment (lo

Exercise 12-17 Dropping or Retaining a Segment (LO12-2] Bed & Bath, a retailing company, has...

80.2K

Verified Solution

Question

Accounting

image
Exercise 12-17 Dropping or Retaining a Segment (LO12-2] 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 Pixed expenses Net operating income (loss) Department Total Hardware Linens $ 4,230,000 $3,150,000 $1,080,000 1,277,000 860,000 417,000 2,953,000 2,290,000 663,000 2,270,000 1,380,000 890,000 $ 683,000 $ 910,000 $ (227,000) A study indicates that $372,000 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 20% 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: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Family Medical Care (FMC) is a family medical practice with 8physicians, a nursing staff...

Accounting
Q

compare the renaissance to the reformation . what common ideas did both movements share , and...

Psychology
Q

The following data were drawn from a normal population. Find a 98.4% confidence interval for the...

Basic Math
Q

Why is ATP required for glycolysis a ATP makes it easier to break apart glucose...

Biology
Q

Joe is trying to determine if taking vitamins will help his headaches and goes to...

Basic Math
Q

S T 10 An initial investment of 2000 doubles in value in 8 1 years...

Algebra
Q

The polynomial function f has exactly one positive zero Approximate the zero correct to two...

Algebra
Q

Which of the below is the factored form of the polynomial showr m 6m 40...

Algebra
Q

Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers...

Accounting
Q

Please write cheque #2715 to Ludwig Inc. to pay for the April 17 invoice regarding...

Accounting
Q

TechMaster is an information technology (IT) consulting company offering services to small firms. TechMaster bills...

Accounting
Q

Theresa Davis is in the 30% personal tax bracket. She is planning to buy $5,000...

Finance