Exercise 11-17 Dropping or Retaining a Segment [L011-2] 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 incone (loas) Total 4,340,000 $3,180,000 $1,160,000 1,373,000 971,000 402,000 2,967,000 2,209,000758,000 2,210,000 1,360,000 850,000 s 757,000 849,000 (92,000) 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 Depart entis dropped. In addition, the elimination of the Linens Department will result in a 12% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Answer is complete but not entirely correct. Financial (disadvantage) (638,080) Prev 1 of 11 Next > MacBook Air 2 3 4 6 9