Exercise 12-17 Saved Help Save & Exit Submit Check my work Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: 10 points $ $ Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Total 4.210.000 1. 32., 000 2. 889.000 2, 330.000 559.000 Department Hardware Liners 3.050,000 S 1,160,000 903, 000 1 18,000 2. 147.000 742, 000 1, 170,000 860,000 677.000 S (118,000) eBook Print $ $ References A study indicates that $378,000 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 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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