Department Total Hardware Linens Sales $ 4,170,000 $ 3,160,000 $ 1,010,000 Variable expenses Contribution margin Fixed...

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Department Total Hardware Linens Sales $ 4,170,000 $ 3,160,000 $ 1,010,000 Variable expenses Contribution margin Fixed expenses 1,354,000 944,000 410,000 2,816,000 2,220, 000 $ 596,000 $ 2,216,000 600,000 1,410,000 810,000 Net operating Incone (loss). 06,000 S (210,000) A study indicates that $380.000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Depertment is dropped. In addition, the elimination of the Linens Department will result in a 17% decrease in the soles of the Hardware Department. Required: What is the finencial adventage (disedventage) of discontinuing the Linens Department? Answer is complete but not entirely correct. Financial (disadvantage) 53,280 Department Total Hardware Linens Sales $ 4,170,000 $ 3,160,000 $ 1,010,000 Variable expenses Contribution margin Fixed expenses 1,354,000 944,000 410,000 2,816,000 2,220, 000 $ 596,000 $ 2,216,000 600,000 1,410,000 810,000 Net operating Incone (loss). 06,000 S (210,000) A study indicates that $380.000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Depertment is dropped. In addition, the elimination of the Linens Department will result in a 17% decrease in the soles of the Hardware Department. Required: What is the finencial adventage (disedventage) of discontinuing the Linens Department? Answer is complete but not entirely correct. Financial (disadvantage) 53,280

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