Question: please help Bed & Bath, a retailing company has two departments--Hardware and Linens. The company's most recent monthly contribution format income statement follows Sales Variable
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) Department Total Hardware Linens 54,200,000 $3,030,000 $1,170,000 1,405,000 987,000 418,000 2,795,000 2,043,000 752,089 2,270,000 1,390,000 B80,000 $ $25,000 $ 65,000 $ (128,000) A study indicates that $377,000 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 o 17% decrease in the sales of the Hardware Department Required: What is the financial advantage (disadvantage of discontinuing the Linens Department
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