Chapter 11 Homework Saved 7. Bed & Bath, a retailing company, has two departments--Hardware and Linens. The company's most recent monthly contribution format Income statement follows: 1 Dos Department Total Hardware Lineos Sales $ 4,240,000 $ 3,150,000 $ 1,090,000 Variable expenses 1.359.000 959.000 400,000 Contribution margin 2,581,000 2,191,000 690,000 Fixed expenses 2,110,000 1,300,000 10,000 Net operating Income (Loss) $.771.000 5891.000 5 (120,000) A study indicates that $373,000 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 17% decrease in the sales of the Hardware Department Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Heterences