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6 CEILIJE 13 MIYU UIupphy U RELOY a Deymen [LUIS) Bed & Bath, a retailing...

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Accounting

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6 CEILIJE 13 MIYU UIupphy U RELOY a Deymen [LUIS) Bed & Bath, a retailing company, has two departments --Hardware and Linens. The company's most recent monthly contribution format income statement follows: 2 points Sales Variable expenses Contribution margin Fixed expenses Department Total Hardware Linens 54,250,000 $3,180,000 $1,070,000 1,260,000 544,00 416,00 2,990,000 2,336,000 654,000 2,330.000 1,450,000 880,000 5 660,000 5 586,000 5 226,000) thet operating income (loss A study indicates that 5376,000 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 18% decrease in the sales of the Hardware Department Required: What is the financial advantage (disadvantage of discontinuing the Linens Department

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