Question: 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

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 (los) Department Total Harduare Linens $ 4,200,000 $3,130,000 $ 1,070, eee 1,354,000 947,000 407,000 2,846,000 2,183,000 663,000 2,230,000 1,340,000 890,000 616,000 843,000 $ (227,690) A study indicates that $378,000 of the fixed expenses being charged to Linens are sunk costs of allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 16% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department

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